Q4 used market starting to soften, says Aston Barclay
The used car market is seeing the first signs of returning back to some normality, with prices and demand stabilising and supply continuing to gradually rise, according to Aston Barclay.
The change is in contrast to an “unstoppable” Q3 and shows shifting buyer attitudes, according to the firm.
Figures from the latest Aston Barclay Insights used market report show that late and low (12-24-month-old) and fleet used prices rose by 7.3% and 6.5% in Q3 to £16,383 and £11,653 respectively.
A severe shortage of stock fuelled the quarterly £1,122 rise for late and low cars while an all-time low average of 39,000 miles and high dealer demand for cars in the £8-12,000 price band contributed to fleet prices rising by £715 during the quarter.
Meanwhile, dealer part exchanges beyond 60 months of age sold saw values fall across all sectors in Q3 by an average of 8.8%, after the extraordinary rises (up to 20%) experienced in Q2 as the market came out of lockdown.
Supply improved dramatically in the old and budget part exchange sectors, while supply of younger part exchanges at between 55-78 months old reduced as dealers chose to hold onto their stock to retail rather than send them to auction.
“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,” explained Martin Potter, Aston Barclay’s managing director – customer.
“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,” he added.
Aston Barclay also warned of a number of unknowns coming up in Q4 that may impact on consumer and dealer confidence. These include the end of the original furlough scheme, repossessions and voluntary terminations flooding into the market and ultimately the impact of Brexit.
“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 continue to be extended due to new car delays,” said Potter.