Record used car prices and all-time diesel high seen in Q2
Used car prices at Aston Barclay hit their highest-ever level in Q2 as demand continued to exceed supply post-lockdown, amid predictions of continued buoyancy in Q3.
Older used cars were the most in demand in Q2, with stock between 55-78 months rising by 20.6% (£1,318) to £7,708 and stock between 79 and 126 months rising by 13.1% (£667) to £4,021.
Diesel used cars once again showed their strength with prices rising by 31.3% (£2,386) to £9,999; an all-time high. On the back of the strong diesel market, fleet prices rose 9.6% (£965) to £10,938 with Aston Barclay selling cars online for fleet vendors online throughout the pandemic lockdown.
Alternative fuelled vehicles (AFVs) rose again in Q2 by 7% (£943) to £14,275. However, the market should be cautious about used prices of hybrids going forward according to Aston Barclay’s auctions director Martin Potter.
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.”
In Aston Barclay’s recent customer poll, 32% said their go-to fuel type of choice currently was diesel, 26% petrol and 41% hybrid and EVs. When asked what their preference would be in 12 months’ time, hybrids and EVs rose to 63%, while diesels fell to 21%, reinforcing the speed at which the fuel landscape is predicted to change.
Used car demand and pricing is expected to carry on in the same vein in Q3, with a recent customer poll predicting a score of eight out of 10 for both.
There’s also light at the end of the tunnel regarding the current stock shortage. Aston Barclay saw more supply coming into the market during the first two weeks of July, while finance houses are working through a backlog of collections following cars coming off fleet during the lockdown.
The firm said it expects this gradual rise in volumes to continue through to October when the Covid-19 enforced lease contract extensions reach the used market, which suggests prices may well calm down over summer.
“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,” he said.