Used car prices here to stay
The latest market tracker report published by Cox Automotive is predicting that used car prices may never return to pre-pandemic levels.
The report found that the coronavirus pandemic has rapidly accelerated the online and digital marketplace and as a result demand for used vehicles has outstripped capacity and will continue to do so.
Philip Nothard, Insight and Strategy Director at Cox Automotive, warned that there is no tsunami of used stock on the horizon while it also can’t be ignored that around 1.4 million new vehicles have been lost from the market, which will never enter the used vehicle parc. Although the impact in the sub-12-month market has been felt already, it will without a doubt have a bearing on the sector for years to come.
The report found that last month the average age and mileage of cars sold both decreased, while used car values continued to rise, with the average sale price experiencing one of the largest month-on-month increases of 16.8% to £8,553.
Nothard said: “Back in July, we asserted that the used car market has never been more critical to the overall health of the automotive industry than it has been in 2021. The last few months have given more weight to this suggestion.
“While prices have now increased for eight consecutive months, recent signs point towards a potential softening in the market. But it’s important to remember that this is traditionally a slow period as retail activity slows ahead of Christmas. Prices are expected to drop in line with usual market cycles, so current prices still reflect a high demand with a low supply market and we expect current market conditions to continue throughout the first quarter of 2022, and it’s entirely possible that we are seeing a revised benchmark for the used vehicle parc.”
