The majority of dealers will be holding firm on used car prices in the weeks ahead, a new survey has found.
Nine in 10 dealers will not be cutting their used car prices as showrooms begin to open from today (June 1), Cox Automotive UK has announced.
Its latest dealer sentiment survey reveals that just over half (54 per cent) of those surveyed said they’ll hold firm on prices, while a third say they’re waiting for market data before deciding.
Less than 10 per cent plan to implement reductions across the board.
Cox Automotive’s Philip Nothard said: ‘We’re encouraged by the sentiment shared in this latest survey. It’s reassuring to see the overwhelming majority of dealers taking a calm and sensible view of their pricing strategies, despite the pressure they inevitably feel to get cash flowing back into their businesses.
‘It’s absolutely right dealers wait for market data that’s based on actual transactions now. We expect unusual things to happen with used prices over the coming weeks as supply and demand imbalances work out.
‘It’s inevitable dealers will be more receptive to deals from genuine buyers in the short term, but overall the feeling is used prices will settle reasonably quickly so panic-pricing to clear stock is not in the best interests of anyone.’
Speaking exclusively to Car Dealer Magazine last week, trade valuation experts CAP HPI said that prices of older used cars have fallen by around five per cent during lockdown – and could drop by as much as seven per cent over the next 12 months.
Cars less than five years old have not been moved in price by CAP yet as it is waiting for trade volumes to increase before adjusting these values.
The firm’s head of forecasts, Andrew Mee, told Car Dealer Magazine: ‘The next 12 months could be quite difficult.
‘Values by next summer could be around seven per cent lower than they otherwise would have been.
‘This is where we see a bit of pressure on values, because although I think there will still be good demand from a number of people, a lot of people will be concerned about the economy, about job insecurity and spending money on a big-ticket item like buying a new or used car.
‘So we think over the next 12 months the balance between supply and demand is going to switch towards there being oversupply.’
Mee went on to say it could be three years before used car prices start to level out and return normal.
The comments were made during one of Car Dealer Magazine’s daily live broadcasts.
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