7:47 am, January 27, 2022
A used car valuations expert has predicted that used car prices may never return to previously seen lows recorded before the pandemic.
CAP HPI director of car valuations Derren Martin told Car Dealer in an exclusive video interview that the scarcity of new cars coming out of factories at the moment could keep prices buoyant for years.
Car factories are currently operating at their lowest level since 1956 as a global shortage of computer chips has stalled production lines across the globe.
There are reports of some new cars facing 18-month waiting lists while other car makers have been forced to cancel orders as they simply can’t get the parts to make the cars.
‘It’s pretty positive for pricing,’ Martin told Car Dealer in an exclusive video interview.
‘Personally, I don’t think [Used car prices] are going to come back down to where they were previously.
‘I think they will stay strong. They can’t stay where they are longer term but they will return to a level where the market is comfortable with them.’
Used car prices rose 27.6 per cent in 2021 and while price rises have slowed in November, December and January they have not dropped off a cliff.
Some car models rose by as much as 60 per cent during 2021.
Martin said people will now have to get used to paying more for their cars, but added that the flip side was that their cars were worth more too.
‘We lost a million and a half registrations [of new cars during the pandemic] because of what happened and this year isn’t going to be up to normal levels, so we’re going to be at about 2 million new cars over a three year period.
‘They won’t come back as used cars as they weren’t new cars so there will undoubtedly be some shortages out there.’
In 2019, before the pandemic, there were 2.3m new cars registered. In 2021, just 1.6m new cars were registered.
Martin added that this means that prices will not ‘come down nearly as much as they went up by’.
He added: ‘When you look longer term those cars are lost to the market. That means it will affect values of cars in two to three years time as there will be a scarcity of certain ages of cars.’
You can watch the full video interview at the top of this story.
