USED CARS just reached new record prices - but with no let-up in sight, now is NOT the time to wait for a buyers’ market.
That's the message from the online used car supermarket buyacar.co.uk, which just reported average used car prices reaching their highest ever level.
The current car-buying scramble looks set to continue driving up prices thanks to the twin impacts on the new car market of the coronavirus crisis and a global shortage of key components.
Under normal circumstances more than enough used cars are available to go around, thanks to the overproduction of new cars, which usually sees thousands sold as second-hand cars, despite only having a few miles on the clock. But major constraints on new car production are holding back nearly new car supply, with a further knock-on effect of fewer part-exchange vehicles returning to the market.
Another part of the dynamic increasing demand in the new car market, is long waits faced by customers who order many of the new cars which are not already held in stock by dealers or manufacturers.
Research by buyacar.co.uk recently revealed that many popular new models are currently taking between three and five months from order to delivery*.
Used car price inflation is currently described by observers as 'a perfect storm', with demand soaring as Covid restrictions are lifted, while the global shortage of semiconductors holds manufacturers back from being able to ramp up new car production.
It means that motorists who are hoping to change their car in the short to medium term may be unwise to wait for prices to settle.
"Biting the bullet today may well prove to be a sound decision for many motorists", said Christofer Lloyd, Editor of buyacar.co.uk.
"Although it's natural to hope that a short-term disruption to the market will settle down, the risks of waiting if you need to change your car today are starkly illustrated by comparing prices today to those in January.
"Our five most popular models cost an average of £12,296 at the start of the year - but that average figure has risen this month to £15,069."
Fewer new cars available not only means that the all-important supply of nearly new cars has all but dried up, it has also reduced the number of part-exchanges which are the real lifeblood of the used car market.
This adds up to a stark choice for motorists who would like to change their cars now. Even if they wait another six months, few experts believe the market dynamic will have changed substantially by then, so they may still end up paying even more to change. And if they wait longer, for some there will be a risk of being forced by the condition of their existing car to buy one anyway and end up paying more.
Christofer Lloyd said: "As the prices we are seeing show, anyone who was considering buying a used car in January would have been substantially better off doing so then, rather than waiting until the summer. And all the signs are that the same argument applies now - so our advice is to move now."
*Article Source http://buyacar.co.uk