April’s new Startline Used Car Tracker also reveals that 36% think more manufacturers will change their minds and drop agency, 23% that it is proving wrong for dealers, and 21% that it is proving wrong for manufacturers.
Over the past year, used car prices and values have fallen by about a fifth caused by factors such as gradually increasing stock supply and reduced consumer demand. The general view on this has been that prices and values were inflated to a very high peak and that some form of readjustment was always going to come.
While the used car market remains very resilient, there’s undoubtedly a readjustment underway following several boom years in the wake of the pandemic, so dealers are looking for ways to maximise sales.
Startline’s December Used Car Tracker also reports that half (50%) think that some cars have become effectively uninsurable, so are probably unsellable. The research also reports that 23% think that it has become well-known among both trade and consumers that certain cars are easy to steal.
Startline’s November Used Car Tracker also shows that 29% believe the move will mean the used electric vehicle (EV) market will take longer to develop while 19% forecast that consumer demand for EVs will fall. Additionally, 24% of dealers now believe it is more likely that motorists will buy a hybrid as a stepping stone to full electrification while 20% believe that EV prices will fall further in addition to recent reductions.
Dealers now think there will be further falls for EVs as consumers choose to take longer to electrify and that this will also bump up petrol and diesel values and prices. They believe that Rishi Sunak’s decision will have a very direct effect on the market and the fuel choices made by consumers over the next few years.
Paul Burgess, CEO at Startline Motor Finance, said that for most of this year, around 20% of dealers have mentioned the agency model as a challenge but there has been a definite increase this month. Why this has happened is not clear, but it may just be that the full implications of manufacturer plans to attempt to manage their vehicles in the used market for a longer period of time – into second and third lives – are becoming more obvious.”
October’s new Startline Used Car Tracker shows that 70% think congestion zone charges will rise and the same percentage expect service and maintenance to increase. Other costs expected to go up include motor insurance (67%), tyres (65%) and petrol (55%).
Running costs are the most important factor now named by 74% of motorists compared to 62% in April, followed by the cost of living, which is now at 65% against 61% over the same period. Similarly, inflation has risen from 26% to 36% and job security from 20% to 24%.
The impact of high housing expenditure on personal finances also means 12% have stopped using their car altogether while 10% want to swap their current model for one that costs less to run - and 5% may have to sell their car altogether.
