7:05 am, July 8, 2020
Used car prices fluctuated by less than one per cent in June – much stronger than the price drops seen this time last year.
Cars sold at less than £10,000 last month saw prices increase by 0.72 per cent compared to a 0.23 per cent fall in 2019.
Meanwhile, cars in the £10,000 and £19,999 recorded a marginal drop of just half a per cent compared to the same month last year when they fell nearly seven per cent.
This strong performance was echoed in other price brackets which all recorded tiny drops in prices this June compared to big hits last year, according to the latest used car pricing from Cazana.
Cars in the £20,000 and £29,999 fell by just 0.02 per cent compared to a 6.4 per cent fall last year, £30,000 to £39,999 priced used cars fell by 0.52 per cent compared to a 6.15 per cent last year; and £40,000 to £49,999 fell by only 0.04 per cent compared to a 6.53 per cent drop in 2019.
These strong performances for the month where seasonal drops in June would usually be recorded shows the strength of the used car market at the moment.
Cazana’s director of insights Rupert Pontin explained that last year the whole market saw a reduction of retail pricing of 6.38 per cent in the month whereas car prices actually increased by 0.03 per cent in June this year.
Car prices remaining firm has also been due in part to the lack of available replacement stock through the auctions and he explains that this was exacerbated by the logistics staff remaining on furlough.
Pontin said: ‘Looking at the whole month’s data, retail pricing has increased but only marginally.
‘It is wise to remember that the detail shows some significant peaks and troughs on a week by week basis specifically when looking at different fuel types, OEMs and individual models.
‘The retail consumer has largely felt comfortable with the new sales environment but at the same time, the development of “mouse to house” solutions has accelerated as predicted by Cazana in April. This is essential to ensure the industry reaches all customers including those that feel uncomfortable going to the showrooms.’
He said that while the mid-term future looks positive, car dealers must consider what could happen in autumn when government support runs out.
He added: ‘It is acknowledged that a recession is on the way and that unemployment will rise but the question is how long will the recession last, and what will happen with consumer confidence and disposable income.
‘What is certain is that understanding market trends and nuances will be the key to ensuring that commercial strategy is developed to suit the changing market.
‘The need to be flexible and responsive in operational structure, pricing and stocking has never been more important.’
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