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Data firm Cox Automotive has marginally downgraded its used car market forecasts, citing dwindling supplies of stock and declining consumer spending habits.
However, the company does not believe a major crash is on the way.
Its full year forecast for 2022 is now for 7.4 million used car transactions, down by 1.3% on its previous forecast, and representing a 1.6% fall year-on-year.
Cox said a recent decline in used vehicle values would continue during Q2 of this year, and possibly into Q3.
Cox insight and strategy director Philip Nothard said: "Used vehicle values are still at a significant high point compared to the pre-pandemic market, and the effects will be different across all makes, models, and ages. For example, there is still high demand in the sub £5,000 and £10,000 sectors and higher-priced vehicles, while the mid-market is feeling the most pressure as mass-market buyers tighten their belts to compensate for the rising cost of living.
"Consequently, it has never been more important for retailers to analyse their pricing position, review stock profiles, and regularly monitor the retail and wholesale markets. But, as the old saying goes, the devil is in the detail."
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