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Second-Hand Motor Cars (Prices)

Volume 436: debated on Tuesday 15 April 1947

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asked the President of the Board of Trade what action he proposes to take to control the prices of second-hand motor cars, in view of the excessive prices at which they are now being sold.

the Ministry of Supply (Mr. Woodburn): I have been asked to reply. The control of prices of second-hand motor cars is not considered to be practicable. As the reasons are varied and long, I will, with the hon. Member's permission, circulate them in the OFFICIAL REPORT.

Does that answer mean that this racket is to continue, and that the hon. Gentleman is powerless to do any thing in the matter?

No, Sir. The point really is that the cure may be worse than the disease; and there is a good number of problems to be solved before that can he done.

Following are the reasons:

The proposal to impose price control on second-hand cars was frequently considered during the war years and was rejected because:

  • 1. In so far as it might have been effective, it would have tended to defeat the object of making second-hand cars available at prices lower than those being paid. Owners of good cars who might otherwise have been ready to sell would have refrained from doing so and those in need of a reliable car would have found it even more difficult to obtain one.
  • 2. It would have been impracticable to fix any upper limit other than the list prices new, and this would have tended to level prices at the maximum with a consequent increase for poor cars other wise obtainable at a lower price.
  • 3. Many dealers had made bona fide purchases at higher prices and it would have been unfair to forbid them to sell except at a loss.
  • 4. A black market would undoubtedly have been created and it would have been impossible to prevent the surreptitious inclusion of additional consideration in transactions
  • 5. To make the control effective a system of licensing all sales whether by private individuals or by dealers would have been required. This would have been difficult to administer effectively, and would have required a substantial organisation.
  • These considerations still arise, though in different degrees, but the most serious objection to imposing price control at the present time is that it would be ineffective. If control were restricted to sales by dealers, as was done in the case of motor cycles, cars would continue to be sold privately at high prices. If control were applied to all sales, a black market would at once develop, and the setting up of a licensing system or other machinery necessary to check such a development would not be justified in present circumstances.