According to different press sources, the used-vehicle market is booming and while it seems to be a great time for sellers, it is not so much for buyers.
CAP Hpi’s daily live trade values show that, on average, trade prices for used vehicles have increased by £1,700 (€1983,77) or 13.5% in the last three months. Younger cars, up to one-year old, have seen rises of £2,500 (€2917) in the same period. In June alone, the average used car price was up 4.8%.
There are many economic factors that are elevating car prices, such as pushing inflation, new-car production experiencing because of constraints on material availability and the global chip shortage. Consumer searches for used vehicles are now double what they were a year ago. That means the cars are being sold a lot faster. According to CAP Hpi, “Consumer demand has remained very strong in June, despite half-term, great weather, and Euro 2020 to distract people."
According to Derren Martin, head of valuations at Cap HPI, every sector and fuel-type has seen values increase in May. Examples of some volume models from across various sectors that have increased in value at the 3-year, 60,000-mile point are Ford Fiesta (+6% or £500), BMW 1-Series Diesel (+7% or £850), Hyundai Tucson (+10% or £1,150) and Vauxhall Zafira (+9% or £750).
Martin concluded that even if demand dips from its current levels, supply is still going to be lower than normal for some time yet.
“With new cars being in such short supply and likely to continue to be so for at least the next quarter, there is no bow wave of fleet returns coming through. One million less cars have been registered than would reasonably have been forecast over the last 18 months. These cars are lost to the used car market. It will be a while before supply outweighs demand again.”
