10:30 am, May 3, 2020
Used car prices across the country appear to be stable during the coronavirus crisis, according to the latest research.
While there are some regional drops – down -4.3 per cent in south central England and -1.4 per cent in south east England – there is evidence of some prices creeping up.
The eBay Motors Group data has found that in London and Scotland dealers have actually increased their asking prices for used cars.
Car Dealer Magazine investigated the used car market this week and dealers said they thought the trade needed to ‘hold its nerve’ on prices.
There are fears that dealers returning to the market could attempt to generate much-needed cash by selling stock at reduced prices, causing the market to tumble.
Dermot Kelleher, head of marketing and research for eBay Motors Group, said: ‘It appears that for both the franchise and independents sectors, the majority continue to avoid distressing their inventory.’
The online classified advertising group also analysed Google search traffic for ‘used car’ and ‘cars for sale’ search terms from the beginning of February to April 25.
It shows a sharp decline as lockdown measures were introduced and plateaued around the time the Prime Minister Boris Johnson was admitted to hospital.
However, while the search term for used cars has remained pretty static ever since, the volume of searches for ‘cars for sale’ have increased marginally from Easter Sunday to around half the level they were before the crisis.
Daksh Gupta, Marshall Motor Group CEO, told Car Dealer earlier this week: ‘I don’t believe prices will come crashing down.
‘This is because ultimately residual values are determined by supply and demand which drives market data that dictates that movements downwards as well as upwards.
‘There is very limited demand right now and supply is not out there either, as a result there is no market data which is why CAP and Glasses are not altering values.’
Other dealers told us they believed used car prices will go up – as has been demonstrated in this research.
Jamie Caple, of independent dealer Car Quay, told us: ‘I’m confident prices won’t just hold, I think they’ll go north fairly sharpish once lockdown ends.
‘Of course there will be some garages looking to generate cash quickly plus some feeling the pressures of stocking facilities who’ll want to bail out but by-and-large prices will be strong.
‘The last thing we need to do as an industry is panic, I think it’s going to be difficult to buy stock once lockdown is over so what’s the point everyone undercutting each other to then find out we can’t replace what we’ve just sold.
‘Selling tenners for fivers and then having to pay tenners for fivers makes absolutely zero sense. Hold tight.’
May 9 Investigation: Is now a good time to buy a used car and what will happen to used car prices? Everything we know so far on used cars
Investigation: Why dealers need to hold their nerve on used car prices
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