In recent years, used cars demand has skyrocketed and anyone looking to buy something second-hand was going to be shelling out a lot more than they would have even a few months prior. In October 2021, The AA reported a staggering 57% increase in used motors since 2019. A variety of factors affected the used car market and the high demand drove up prices, making them pretty unaffordable for many.
What are some of the other factors that affected the used car market?
- Low interest rates made financing a car more affordable meaning more people were purchasing cars but…
- Supply chain disruptions limited the availability of new cars
- Many people were financially impacted and looked for more affordable options than buying something brand new
- Remote work and remote learning made owning a car more necessary
And of course, as with most things, when demand goes up, so do prices and second-hand or used cars were suddenly costing a whole lot more than they did before the pandemic. Prices remained high for quite a while but just before Christmas there was a noticeable dip in the cost of second-hand motors.
Why has the market changed?
According to Forbes, “used car prices paid by wholesalers last month fell the most on a yearly basis since at least the late 1990s—continuing a steep decline that should bode well for overall inflation, which has long been plagued by supply chain constraints driving up the price of used vehicles.” The publication goes on to explain that “Goldman Sachs economists also said they expect used car prices to decline for consumers, reflecting lower auction prices and easing supply constraints.”
In a nutshell, fewer supply chain issues and a steadying market meant that the cost of second-hand motors not only stablised but is in fact continuing to fall. According to Car Dealer Magazine, “Cap HPI data shown to Car Dealer reveals December was the third biggest drop in prices in 2022 after March and April, which both dropped by 2.1 per cent.”
So, are second-hand cars still in demand?
The answer is a resounding yes. The cost of living crisis means people are still turning to the used car market to buy a motor due to a brand new one not being financially viable. Consumers continue to seek out cost-saving and practical options to save money, and buying a used vehicle is certainly one way to do it.
What should I look out for when buying a used car?
If you are thinking of buying a used car, here are a few pointers to consider to make sure you’re getting the best deal.
- Vehicle history report: Check for any accident history, past ownership, and maintenance records.
- Mechanical inspection: If possible, get a mechanic to inspect the car for any potential issues and make sure to check for regular wear and tear. Also, make sure the car has passed its latest MOT and check for any failed MOTs in its history.
- Test drive: Take the car for a test drive to assess its performance, handling, and comfort. In other words, make sure you like driving it!
- Mileage: Check the milage and ask the owner how many miles they’ve done in it in the past year or two.
- Exterior and interior condition: Check for any visible damage, rust, or signs of wear and tear.
- Price: Research the fair market value of the car to make sure you are not paying more than it is worth.
So, there you have it. Used cars aren’t going anywhere, but hopefully the cost of them has returned back to normal once and for all!
