Older cars and diesels drive record used car values
20 July 2020
Author: Sean Keywood
Remarketing firm Aston Barclay says it recorded its highest ever used car prices in the second quarter of 2020, including a big rise in fleet car values.
It says the overall market rise is attributable to demand exceeding supply during and after lockdown, and that strong values are expected to continue during the next quarter.
Older used cars were most in demand, with the average price of stock between 55 and 78 months old rising by 20.6% to £7,708, and stock between 79 and 126 months old rising by 13.1% to £4,021.
Diesel used car prices reached a new record high at £9,999, having risen by 31.3%, and this strong performance drove a 9.6% rise in fleet prices, to £10,938.
There was also a 7.9% rise in alternatively-fuelled vehicle (AFV) prices, to £14,275. However, Aston Barclay auctions director Martin Potter thinks the market should be cautious about used hybrid car prices going forward.
He said: "Aggressive new hybrid car pricing could impact demand, particularly for 18-24-month old used models and prices could start to soften. Q2 saw another increase for AFVs but mainly because of a lack of stock in the market.
"Consumer education of buying and running a used AFV must continue in line with the increased supply to ensure the consistent growth of the used green market."
Regarding the current overall stock shortage, Aston Barclay says it saw more vehicles entering the market in the first two weeks of July, while finance houses are working through a backlog of collections following cars coming off fleet during the lockdown.
Aston Barclay expects this gradual rise in volumes to continue through to October, when lease contract extensions enforced by Covid-19 reach the used market, meaning prices may settle over the summer.
Potter said: "The used market will feel very different this summer. The sleepy July and August months will see dealers buying much needed stock prior to the new 70-plate change and vendors getting as many used cars into the market to take advantage of the high prices.
"It could be Q4 before the market starts to get back to a new normal."