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Adapting to an Evolving Used Car Landscape

Mann Island

20 Mar 2024 2 minutes

After an ‘unprecedented’ period when used car values rose over an extended period, four consecutive months of falling used car prices in the closing months of 2023 was headline news across the motor retail sector. It will also have gained the attention of many consumers.

While used car values saw an unprecedented rise immediately after COVID lockdowns ended, a trend linked to a shortage of new cars, that trend has ended. Over the last year, used vehicle values have essentially returned to more traditional depreciation trends. Effectively, the market has reset itself.

The motor trade may understand the change and rationale, but consumers may find things confusing.

On the upside, falling prices may be good news for people looking to buy a used car.

However, if they have a car to sell, it is unlikely they will realise the price they might have done in 2021/23 years. For new car buyers, Guaranteed Future Values will have slipped back because of the fall in used car prices. The net result here is that monthly payments will rise on a like-for-like basis.

A level of stability is likely to be achieved, but the marketplace is also changing with the emergence of Battery Electric Vehicles. Again, their used values dropped sharply last year, but since the start of the year, values have stabilised, with more consumers looking to benefit from falling electricity prices and lower servicing and road tax costs.

In short, it is a highly dynamic market, and in the spirit of transparency, posts like this are needed to ensure car buyers understand the multiple factors impacting the used car market right now.

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