Fresh analysis by Glass’s indicates that used car prices in the 2nd half of this year should generally stick to the seasonal norm, despite the possibly harmful elements of current economic uncertainty and probability of even more reduction in retail demand. Glass’s forecasts that monthly price changes for the rest of 2010 will be only marginally worse than those of the past 5 years.
For much of this year used car prices have followed similar patterns to those observed during recent years, with a rise in the 1st quarter followed by a decrease in the 2nd. The distinction in 2010 is that prices have dropped more sharply in May and June. If the second-half adjustments in prices observed in the last 5 years were duplicated this year, a three-year-old car with a current trade price of £10,000 would be worth £9,100 by the close of the year, having covered another 6,000 miles. However, Glass’s is now predicting that this figure will instead be around £8,750.
“Lacklustre consumer demand for used cars – influenced by the prospect of reduced disposable incomes resulting from Government austerity measures – would be expected to impact on prices up to the end of 2010,” said Adrian Rushmore, Managing Editor at Glass’s.
“But ongoing low levels of new car registrations are generating reduced volumes of part-exchange vehicles, leading to a shortage of used cars. Even though the supply of used cars is likely to be lifted by the normal influx that accompanies the new September plate, the consequential fall in prices should be little different to what was experienced in the years prior to 2008.”