The last 12 months have been crazy for used car prices. For 84 consecutive months, prices have increased with the result being the value of some cars increasing by up to 30% in 2021 compared to 2020.
So should we be anticipating a crash in used car prices in 2022 as a result?
The short answer is no. This is because the semiconductor crisis is far from over, with supply chain issues still being felt across the world. As a result, lead times for new cars are extremely long, whilst some customers are being told that some options such as upgraded infotainment systems or reversing parking camera can’t be specified.
Last month, AlixPartners (a global consulting firm) said that it estimated the global automotive industry will lose more than $200 bn (£148 bn) in sales for 2021. Credit: Bloomberg News.
With 5 million cars on UK roads being leased, many people are choosing to extend their leases rather than having to wait too long for a new car, that doesn’t even come with all the kit they hoped for.
The issue with this is that those lease cars help fuel the used car market, which has a trickle-down effect on us all. That’s why we’re now in a situation where there just aren’t any bargains out there.
So whilst I might be sulking that a Sierra Cosworth is more out of reach than ever, with new car registration falling (as I covered back in October), it’s no surprise that used car prices are buoyant.
Of course, if you have a car to sell or trade in, then the upside is your car is worth far more too! In reality then, you may not really be paying more for your next car.
We spoke to our friends at Prestige Cars Kent who commented on the current state of the used car market,
“Last year we paid a customer £6,000 more for her Ford Mustang which we had sold her just 6 months previously, and that’s with her adding over 5,000 miles! At the other end of the spectrum, we are listing a Lamborghini Urus for nearly £40,000 more than what we probably would have in 2020. The fact that we have received enquiries before the full advert going lives shows that the demand is definitely outstripping supply.”
Prestige Cars’ buying team shared their tips on getting the most for your car when part exchanging.
“Whilst modified cars can be great, the reality is most dealers will see them as an issue and have to put them back to standard. It’s also very difficult to finance a modified car, which affects the majority of buyers. As a result, we suggest retuning cars back to standard to get the best offer. Unsurprisingly, we pay less for cars which are missing services, or their spare key. Meanwhile, you may find it work out cheaper if you sort out any minor dings yourself. Likewise, if you’re buying a car, you should consider all of these factors before paying the asking price.”
What do you think? Are cars overpriced, or have things settled down? Let us know your experiences in the comments section. Meanwhile, you’re ready to start the New Year with some car shopping, check out the Prestige Cars Kent website
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