Second-hand car owners are selling their used vehicles for more than they paid for them almost a decade ago – due to a huge supply shortage and surging demand.
Its Q3 used vehicle insights report has witnessed overall demand and prices gently slowing down as buyers become more selective due to market conditions, while volumes continue to rise as new vehicle production improves.
Whilst used car valuations are falling (used prices fell by 2% in August 2023) there are no signs of an impending 'price crash'. This has led to many people pondering the question, “When will car prices drop?” In this guide, we will analyse the current market trends for car prices.
For those looking to buy used cars, the market is expecting to see a 10-20% drop in prices which makes 2023 the perfect year to buy a used car in impeccable condition. Below, we have highlighted the biggest opportunities 2023 will bring for you to purchase your car.
Now is a tricky time to get a good deal on a used car. Prices have been rising steadily for more than a year now, driven by reasons related to the pandemic and the current semiconductor chip shortage affecting the new market.
New SMMT figures show increased sales of second-hand cars, but prices look set to stay high for a while. Used car sales grew by just over 4 per cent in the first three months of 2023, following three consecutive quarters of falling sales, but there's little sign yet of high prices easing as more cars change hands.
“We anticipate demand increasing in January and February, which will give the remarketing sector a strong start to the year,” he added. And such increased demand for used cars in early 2024 will break the cycle of gently falling prices that the market has seen for the past 18 months.
October through December is a good time to buy a used car. These months coincide with the peak new-car buying season at the dealership, which means more trade-ins are entering the used car inventory.
The cheapest and most simple way to buy a car is to fund all or part of it in cash. If you're able to pay the whole price in cash, you'll own the car outright.
As the 2035 ban on petrol and diesel cars only impacts new cars, you will still be able to buy and sell used petrol and diesel cars after 2035. So, should you choose to change to another petrol or diesel car, as long as it's pre-loved, you can still buy another car without moving to electric or hybrids.
As much as we'd love to be wrong, it's very likely that both new and used car prices will remain high in 2024. CarEdge co-founder Ray Shefska recently shared his thoughts on the most likely scenarios in the short-term. All things considered, Ray says that continued high prices are all but guaranteed.
The average value of a used car at three years, 60,000 miles, fell by 4.2% in October. However, average values remain around 15% above where they were at the start of 2021 for petrol and diesel vehicles, while electric vehicles (EVs), on average, are around 20% lower.
Average used car retail prices have fallen on a year-on-year (YoY) basis for the first time since March 2020, Auto Trader has found. Its Retail Price Index reveals the average price of a used car was £17,736 in September, down 0.4% year-on-year and 1.2% month-on-month.
Driving a second-hand car reduces the negative environmental of manufacturing a new car. Before buying a car, look at what the fuel consumption of the vehicle is like. If it's low, then it's better for the environment.
He predicts used car prices in 2024 could end the year around one to two per cent higher than where they finish 2023. 'It should be noted that further market adjustments, slightly more than normal seasonal expectations, are expected between now and the end of this year, though,' he added.
In total, 74% of drivers said their most recent vehicle purchase was a used car. The survey also confirmed that young people are predominantly buying older – and therefore often less expensive – vehicles.
While the market in 2023 is starting to come down from its post-covid peak, prices for the most popular models and types of car can still be robust, meaning less room for negotiation.
In retaining “like new” quality and inheriting a slower depreciation rate, the best used car age for buying is 2-3 years. In fact, Americans are saving up to $14,000 on a 3-year-old vehicle. For example, a car that may have cost you $30,000 when new would cost around $16,000 after just 3 years.
These come with new numbers to denote the vehicle's age. From 1st March 2023, new plates will include '23' to show it's a brand new car and from September this will change to '73'.
In the United States, car dealers experience the most difficulty in selling inventory during the winter months, particularly in January, February, and into early March. As the weather improves and people receive their tax refunds, car sales increase during the spring months.
When will diesel and petrol cars be banned? The ban on sales of new models is due to come into place in 2030, with new hybrids being given a stay of execution until 2035 on the condition their zero-emission-mode can cover a significant distance, although this distance hasn't been set by the government yet.
In all likelihood, what will happen to classic cars after 2030 instead is that they will become increasingly expensive to run as petrol and diesel usage dwindles and prices for combustion fuels skyrocket. That will make running a classic car even more of a luxury than it already is.
Cap Hpi's figures show second-hand motor prices have slid by a cumulative 17.8 per cent since the fourth month of 2023. This is largely due to supplies of new models gathering pace following months of shortages triggered by the after affects of Covid-19 and enforced global factory closures during lockdowns.
