Used car auction prices are beginning to soften as a change in buyer demand is seen in October, according to figures from Aston Barclay.
It believes that, as dealer prices began to fall in Q3 and used prices soften in the first two weeks of October, that we are now seeing prices return to normality as demand stabilises.
The auction house had seen 12-24 month old and fleet vehicle used prices rose 7.3 per cent and 6.5 per cent respectively in Q3 to £16,383 and £11,653.
It explained that for late and low cars, this was due to a severe shortage of stock, while fleet vehicle price rises were fuelled by an all-time low average mileage of only 39,000 miles paired with high dealer demand for vehicles in the £8-12,000 price bracket.
However, prices of dealer part exchanges aged over 60 months fell by an average of 8.8 per cent across all sectors in Q3 following rises up to 20 per cent in Q2.
Aston Barclay is now warning that a number of factors could hit consumer confidence in Q4 but it believes prices will ‘remain healthy’ into 2021.
Aston Barclay’s Martin Potter said: ‘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.
‘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.’
As the market changes during October there are a number of unknowns coming up in Q4 that may impact on consumer and dealer confidence, including the end of the original furlough scheme, repossessions and voluntary terminations flooding into the market and ultimately the impact of Brexit.
Potter added: ‘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 are extended due to new car delays.’