Used car values could be at their peak and on the verge of dropping according to experts. It’s good news for anyone wanting to buy a second-hand car; not such welcome news for anyone wanting to sell a car and put the money they get towards a new model. Here’s all you need to know about used car prices, when and why they’ll start to fall.
Used car values: Why have they been so high?
During the financial downturn, the number of new cars being sold fell from 2.4 million in 2007 to 1.99m in 2009 and 1.94m in 2011. New cars usually re-enter the market as second hand after three to four years. This is when businesses that have bought them as company cars sell them on and PCP finance deals for private drivers come to an end. By 2012-14, when those cars sold new between 2009 and 2011 would have come on the second-hand market, there would have been a shortage of used models. To balance out that shortage of supply with the regular demand, used car prices will have risen.
Used car values: When will prices start to fall?
The new car market began to grow again in 2012 but it didn’t really get back into its stride until 2013. That means the supply of used cars will start to increase in 2016. Experts predict prices will start to fall towards the middle of next year and into 2017. Daren Wiseman, valuation services manager at auction company Manheim, said: “As long as the economy remains stable, those cars will have an impact on used values.”
Used car values: What’s happening at the moment?
According to used car experts, the market is currently quite delicately balanced. But some cars are doing better than others. Second-hand car seller Auto Trader has revealed its top 10 fastest selling used cars in the UK.
Used car values: What are the quickest sellers?
Auto Trader says the Citroen C4 Grand Picasso from 2014 is the country’s quickest selling used car. It takes an average of 15 days to sell. That is nearly a month and a half quicker than the average amount of time it takes for dealers to shift most used cars, which is 55 days. The Citroen was followed by the 2012 Ford C-MAX which takes 17 days. The 2014 Ford Focus takes 18 days while the 2012 Audi TT and Nissan Qashqai each take 20 days.
The top 10 was rounded out by the 2014 Vauxhall Astra GTC which takes 21 days, the 2014 Vauxhall Mokka on 22 days, the 2012 Renault Grand Scenic and 2014 Ford Mondeo on 23 days, and the 2012 Toyota Prius on 24 days.
Used car values: What about their prices?
Car dealers are provided with price guidelines by businesses such as Auto Trader. Price a car too high and it’ll take too long to sell; price it too low and a dealer’s profit margin will suffer. According to the list of fastest selling cars, the closer dealers price their cars to the Average Price Position, the quicker they’ll sell. The top 10 cars are all within 98.8 per cent of Auto Trader’s recommended price. What does this prove? If a car you’re interested in is hanging around on a forecourt for a period of time, chances are it’s priced too high and the dealer may be more open to haggling.