Aston Barclay predicts softening used car market after record Q3 prices
15 October 2020
Author: Sean Keywood
The used car market will move closer to normality in the final quarter of the year following record prices in Q3, according to remarketing firm Aston Barclay.
It says average prices for 12-24-month-old cars rose by 7.3% in Q3 to £16,383, while fleet used prices were up by 6.5% to £11,653.
According to Aston Barclay, the rise in 12-24-month prices was driven by a severe shortage of stock, while fleet values were boosted by an all-time low average mileage of 39,000 miles, as well as high dealer demand.
Elsewhere in the market, dealer part exchange values of vehicles more than 60 months old were down by 8.8%, having risen by up to 20% in Q2, with the overall supply of vehicles improving dramatically while the supply of 55-78-month-old cars reduced.
Aston Barclay says that in addition to dealer prices falling in Q3, all used prices softened in the first two weeks of October, leading it to predict stabilising demand and prices in Q4, with supply continuing to gradually rise.
Aston Barclay's customer MD Martin Potter said: "The market for used cars between 12 and 60 months old was unstoppable in Q3 which is why late and low and fleet prices were so high, but we have witnessed a change in buyer attitudes in early October.
"Many buyers have started to only buy the stock they need for fear of market prices moving downwards and them being left with a number of cars owing them money."
Aston Barclay says many factors may impact the market in Q4, including the end of the government's original furlough scheme, repossessions and voluntary terminations coming onto the market, and the impact of Brexit.
Potter said: "Any one of these could affect dealer and consumer confidence. However, we feel prices will remain healthy into 2021 as new car lead times keep extending.
"This means a flood of used cars hitting the market will be avoided as ex-business and personal leasing contracts are extended due to new car delays."