The used car market could take until October to reach a new normal latest figures suggest, with the current trend of strong prices and high demand for stock expected to carry on throughout the summer.
Aston Barclay has reported high demand for older used cars and diesel models has helped to drive up prices to an all new record in quarter two.
A new poll by the firm reveals eight of ten respondents believe the activity seen in quarter two will continue into the third quarter.
During Q2, older used cars were the most in demand with stock between 55-78 months rising by 20.6 per cent (£1,318) to £7,708, and stock between 79 and 126 months rising by 13.1 per cent (£667) to £4,021.
Diesel used cars once again showed their strength with prices rising by 31.3 per cent (£2,386) to £9,999, which was an all-time high, said the firm.
On the back of the strong diesel market, fleet prices rose 9.6 per cent (£965) to £10,938.
Alternative fuelled vehicles (AFVs) rose again in Q2 by seven per cent (£943) to £14,275, but the market should be cautious about used prices of hybrids going forward says Aston Barclay’s auctions director, Martin Potter.
‘Aggressive new hybrid car pricing could impact demand, particularly for 18-24-month old used models and prices could start to soften,’ he said.
‘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 a recent Aston Barclay poll of some 100 buyers and vendors, 32 per cent said their go-to fuel type of choice currently was diesel, 26 per cent petrol and 41 per cent hybrid and EVs.
When asked what their preference would be in 12-months’ time hybrids and EVs rose to 63 per cent, while diesels fell to 21 per cent.
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 company says 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 the summer.
Potter added: ‘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.’
Potter’s predictions are backed up by Shoreham Vehicle Auctions.
The company’s managing director, Alex Wright, recently told Car Dealer: ‘Supply is starting to improve and will continue during summer, but our normal sleepy used car summer months will be replaced by a busy July and August.
‘Prices will be strong throughout the year but softening slightly around September when used car supplies start to improve.’
Wright’s comments appeared in an in-depth analysis of the used car market by Car Dealer published last week. You can read what nine expects think of the current used car market here.
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