Used car market starts to soften after record October prices reports Aston Barclay
Posted 18 November 2020
The price of late and low used cars, ex-fleet cars and younger part exchanges all rose in price during October, but there are signs in November that prices are starting to soften according to the latest data from Aston Barclay.
Average prices in the late and low 0-24-month and fleet sectors rose by £101 and £104 respectively during October to record levels of £16,484 and £11,757.
Meanwhile young part exchanges between and 55-78 months rose by £711 to £7,682 as dealers rushed to buy used cars that fell into the retail sweet spot of £10-12,000.
Looking at fuel types, a smaller number of hybrid and electric vehicles were sold in October as average prices reached a new record high of £14,660; a rise of £633 since Q3, but many failed to sell due to prices looking expensive compared with equivalent petrol and diesel models. Aston Barclay expects prices to gradually fall on AFVs over the coming months.
The underlying market trend at the beginning of November is one that is starting to soften with conversion rates and prices falling on the back of the Covid lockdown 2.0.
Q4 is already seeing the market return to some sort of normality but predicting demand and prices at each sale is becoming more difficult. Aston Barclay is recommending reserves are revisited sale by sale to stay in touch with the market and fleet vendors in particular will have to accept that assets are depreciating again.
“Many franchised dealers will be replacing sold stock during lockdown 2.0, something which didn’t happen during lockdown 1.0, as only independents were buying cars,” explained Martin Potter, Aston Barclay’s managing director – customer.
“Overall, we feel prices will remain healthy into 2021 as new car waiting times increase forcing ex-business and personal leasing contracts to be extended well into 2021. Repossessions are also now not likely to reach the market until Q2 which will help keep overall used stock volumes under control and prices steady during the first half of the year,” he added.