Let's face it, Christmas is great but it really takes a toll on your finances.
But did you know that all that spending even makes a difference to how much you think your car is worth?
We compared the difference between the prices Wizzle users hope to get for their car and what it's really worth. And we found something interesting. It looks like the closer we get to Christmas, the higher the price we hope to get when we sell our cars.
Here's a sneak preview of our findings, which we are sharing with the media on Friday.
-IT’S WELL KNOWN
that the value of the average car rises in January, when the market takes off again after the December lull.
But a new study of consumers who sell their cars directly to dealers reveals a double whammy caused by Christmas pressure on everyone’s finances.
Wizzle – a website which helps motorists to offer their car to hundreds of dealers – has found that consumers are caught in a December trap between lower values but higher
hopes for the price they will receive.
Motorists who sell their car on Wizzle.co.uk are asked what price they hope to achieve for their motor as well as being provided with an independent real market value.
Analysts at Wizzle have now identified a December ‘double whammy’ which sees consumers hoping to get MORE for their car than usual – just as the real value falls to its lowest point in the year.
Crunching the numbers for cars sold between October and the week before Christmas reveals that the gap between sellers’ expectations and the final price they actually sell for grows to almost five per cent.
In October the difference between what motorists hoped to sell for and the final price they received was just -0.7%.
During November – as the used car market began to slow, as usual for the time of year – that gap grew to four per cent.
But by Christmas week that difference had stretched to six per cent - even though the actual market value they were receiving was only one per cent less than they would have achieved two months earlier.
Wizzle’s comparison of consumer expectations – or hopes – for the value of their car and its real value is believed to be the first time the phenomenon has been identified and it could help both dealers and consumers to better understand each other in the pre-Christmas market slowdown.
Compared with Wizzle’s independent predicted values, provided by experts CAP-HPI, analysts found that dealers began reducing their offers in November – in line with the rest of the market, such as at auctions and in forecourt trade-in negotiations.
At the same time, consumers’ hopes for a higher sale value began to increase so that by December the gap had widened to an average of 6.04%.
Sébastien Duval, founder of Wizzle, said: “Even though it is well known in the industry that the car market slows down toward the end of the year we were intrigued to find that the price expectations of our sellers actually rise on the approach to Christmas.
“We think this is because most of us feel financially pressured by the cost of presents and festive celebrations. It’s possible we psychologically turn those Christmas cost worries into a hope that our car might be worth a bit more than we’d normally expect, just as it becomes worth a bit less!
“Our advice to people who want to sell their car is that dealers see less business at this time of the year – just as they too face all those Christmas costs. Fewer people are buying cars then, so dealers aren’t quite as hungry for stock as at other times of the year.
“But the good news for everyone is that the market takes off again in January and all the experts say the early part of 2017 looks set to be especially busy in the new and used car markets.
“We expect strong dealer enthusiasm for buying cars from consumers not long after the festive season as they will be busy replacing all their sold stock during the January upturn.
“That means January will see a rise in car values and the prices you get, whether you’re selling on Wizzle or wherever you want to sell your car.”