Used car prices have seen huge growth over the last two years as a direct result of the pandemic.
Consumer spending power massively increased as many were saving funds they would have previously spent on activities restricted by lockdowns etc. This combined with consumers opting to use personal rather than public transport meant that demand soared far above pre-pandemic levels and, with the much-reported stock shortages in play, prices soared.
Fast forward to today and pandemic restrictions are all but gone, people are now eager to resume holiday’s abroad and a cost-ofliving crisis combined with war in Europe denting consumer confidence.
So how is this impacting used car prices? So how is this impacting use car prices?
Used car prices remain incredibly strong with April seeing used car prices up 26.5% when compared to the same time last year.
Of course, year-on-year analysis only tells part of the story with prices continuing to be strong but the growth reducing. Looking at the price trend week on week we are starting to see some declines, when during the pandemic we saw continuous growth.
Is demand dropping?
Pricing then remains strong, and there doesn’t seem to be any indicators of the “price bubble” popping anytime soon.
Demand, one of the key factors influencing prices, continues to remain strong when compared to normal trading conditions in 2019. The average time it takes for a used car to sell is significantly faster now for all fuel types compared to last year, with the average time taken for a used car to sell now just 27 days, 10% faster than the same time last year.
“The market has ‘softened’ in terms of vehicle sales compared to the ‘normal’ trading conditions of 2019 and are about flat when compared to last year. It could be described as a more normal market with more predictable seasonal demand in play but supply of some vehicles are still constrained.
What’s in store for the market in 2022?
There are certainly headwinds for the market as we edge towards the middle of 2022 with the cost-of-living crisis tightening man consumers spending power. But there’s a reasonable case for the used car market weathering the storm reasonably well. No one knows 100% today where consumers will cut discretionary spend, but for most, a car is not seen as discretionary. Buyers may trade down makes / models or use the car less but are unlikely not to purchase at all.
There is a stronger demand at lower price bands than during 202 and 2021 – suggesting now people have more things to spend on and with some concerns over increasing costs they are choosing to look at cheaper alternatives rather than not change at all.
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Professionals get that title for a reason; they know exactly wha they’re doing and how to negotiate a good deal. As the public doesn’t have access to most auction houses, they aren’t getting a good perception of just how many cars are available at such cheap prices. You can browse a complete collection of vehicles when buying a car at auction, working with your professional car buyer to draft up a list of vehicles to bid on.
We can attend a range of car auctions across the country to find the very best vehicle and price that suits your needs perfectly. To find out more, or to express your interest in buying from an auction site, please give us a call on 07999 728009. Alternatively, you can fill out our online form here.
