Used car demand fell during January due to lockdown 3 and the market became price sensitive with trade stock costing more than £10,000 according to Aston Barclay’s latest insights report.
Aston Barclay sold several thousand used cars during the month, with dealers changing their stocking plans to reflect the growing consumer demand for used cars with a retail price of less than £12,000.
Stock outside of this price bracket has been less desirable with Alternative Fuel Vehicles (AFVs) taking the biggest price hit. AFV prices fell by 16.9% (£2,403) to £11,805 in January while diesels also fell back during the month, as a result of demand for specific fast retailing stock.
Dealer demand in the young part exchange sector (55-75 months) continued to grow which reflected in average prices remaining strong at £7,230.
The independent dealers were buying used cars throughout January, while many franchised dealers have come back into the market in February looking to replace stock sold on click and collect.
The used car market remains in a good place and while CAP has marked its prices down by nearly 3% over the past two months they are still ahead of where they were this time last year.
However, Aston Barclay’s Managing Director – Customer Martin Potter is not expecting a big upsurge in prices similar to what was experienced at the end of lockdown 1.0 in June.
“We are not encouraging vendors to hold back ex-fleet cars in the hope they will see a massive hike in prices post lockdown that were experienced last summer,” said Potter.
“We do not expect the used market to collapse, but instead return back to a more seasonal norm as we move further into 2021.
“Prices should remain consistent into Q3 as we don’t anticipate new car sales getting back to full strength and deliver its usual volume of dealer part exchanges into the used market,” he added.
Aston Barclay is expecting its first raft of repossessions arriving in the coming weeks which spells good news for finance companies as it coincides with a high demand for sub-£12,000 retail cars.
“Repossessions will provide a good source of used stock over the coming months. Supply and demand will be nicely balanced which should keep prices consistent,” he added.