The market is in realignment, with values dropping by a cumulative 13.6% in seven months since April. It looks like November will see another reasonably large drop. However, values could also start to stabilise, particularly if dealers and car supermarkets start to stock up, with an eye on January.
August has seen less pressure for some of the smaller and medium EVs, and many of these models now hit an attractive price point in the retail market and are encouraging wholesale buyers. The Kia E-Niro , Peugeot 2008 and VW ID.3 have all increased in value this month. However, some heavy reductions have been applied to some more expensive, premium EVs at the 1-year, 10,000-mile point, including the Audi Q4 E-Tron (-4.0%/£1,475), BMW iX1 (-4.0%/£1,675), Jaguar I-Pace (-4.0%/£1,550), Mercedes-Benz EQC (-5%/£1,500) and Polestar 2 (-6.0%/c.£2,000).
Used car volumes are expected to slowly increase in the coming months, as fleets receive replacements for some long overdue vehicles. Modest negative movements for the next few months can be expected for most sectors. This remains slightly favourable to typical seasonality, with dealers continuing to pay good money for the best condition cars and for those at an attractive price point for a quick retail sale.
Sixteen out of the top 20 used cars in Aston Barclay’s May desirability index were high value premium models led by the Range Rover Velar. This included the Audi Q7 and A7, Mercedes GLC and GLE and Range Rover.
Latest research also asked dealers what they thought would be the biggest challenge facing them during the New Year. The cost of living crisis was the top response at 85%, followed by continuing poor vehicle supply (66%), stricter motor finance criteria (38%), reduced motor finance availability (32%) and demand for electric vehicles (26%).
Some families who previously owned two cars are making savings by cutting back to one. Plus, there are undoubtedly other people who are selling their only car when faced with spiralling living costs.
Analysing dealer used car market prices in real time the INDICATA platform is identifying cars every day that are below current market values because of not being re-priced since dealers re-opened for business on 12 April.
It would appear that it’s more than normal ‘pent-up’ demand. There are ‘accidental savers’ that have funds from less socialising, leisure activities and holidays over the last 13-months, many of whom are now looking to make a purchase that is either required or desired.
With pent-up demand from the first UK lockdown and consumers buying to avoid public transport both now declining, trade buyers are wary of paying previous high prices for cars that may now sit on their forecourts for longer and will potentially need to be reduced. This has led to a decline in trade prices across the board.
2020 has been completely different from any other year in history and that includes what has happened to values of used cars, rising against all expectations. It is particularly difficult to predict what may happen, with so much uncertainty due to localised lockdowns – whether or not car retailers can sell and deliver cars in Wales remains a grey area.
