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The used car market in the UK is nothing short of a goliath. Even with 2020 being a year of lockdowns, social restrictions and limited retail – particularly in the automotive sector – used car sales across Britain topped 6.75 million. That figure is a notable decrease against a “normal” year, with the pandemic curbing sales by 14.9% against the 7.9m-plus used car sales across 2019.
Looking beyond linear sales figures, perhaps the most interesting and impactful by-product of such a unique year, particularly where used car buyers and sellers are concerned, is the effect on used car values in the UK – which have seen multiple decade-high month-on-month rises in the last year. Used car values remain incredibly high, and as we near a return to normality, this presents an interesting dilemma to used car owners considering a change – is now the right time to sell?
There’s no doubt it’s a seller’s market right now, so the simple answer to that question would be yes. But to help you get your head around why that is, we’ve put together a quick guide on used car values in the UK, what affects them, and what your next steps should be if you’re considering a sale.
What factors contribute to used car values in the UK?
A used car’s value is affected by a number of fundamental factors:
· Mileage and condition: The two main factors affecting a used car’s value, mileage and condition are often interlinked but not always. For example, a car with low mileage can be subjected to heavier wear and tear than a higher mileage model, or be less well maintained. Your mileage number and the condition of your vehicle are two primary factors to consider when selling, particularly on a private basis.
· Age: Unsurprisingly, the newer your car, the better – in terms of its value. But new car owners need to be wary of heavy depreciation in the first few years of ownership. Typically, new cars can lose 15-35% of their value within their first year, which can increase to 50% or more over three years. For those looking to sell cars sat in that window, then, there’s a question as to whether to sell quickly to maximise sale value or to keep hold of the car for the foreseeable and use it beyond the worst of the depreciation.
· Features: The more options and add-ons your car has, the more value you’re likely to see come from them. Certain premium features, like all-wheel drive, a high-quality sound system and leather upholstery, will help a vehicle retain more of its value. Similarly, the absence of basics like air conditioning, automatic locks and power windows will negatively affect a car’s sale price. As a general rule, car personalisations and mods like oversized wheels, spoilers and exhaust systems are more likely to lower a car’s value than enhance it.
· Additional considerations: There are also smaller factors that can play a part in your used car’s value, including its colour and your location.
Why might used car values be higher right now?
So, to the big question: why are used car values in the UK so high right now? In simple terms, it comes down to how the pandemic and the associated lockdowns have impacted supply and demand in the industry.
Throughout a lockdown affected 2020 and 2021, there have been significant supply challenges in the market, with fewer used cars changing hands due to temporary dealership closures and vast reductions in private sales. Couple this with increasing consumer demand, likely spanning from higher availability of disposable income for many over the period, and you have a market where used cars are hotter property than they’ve been in some time.
The aforementioned month-on-month price hikes in the used car sector have been around since as early as summer last year. In August 2020, for example, used car values on Auto Trader rose by 6.1% to an average of £13,705. Compare this number to figures across 2019, where used car prices averaged out at £12,800, and the impact of the pandemic is plain to see. However, that supply and demand dilemma has only been exaggerated further as we approach normal life once again.
On the precipice of coming out of lockdown, demand figures today are even higher than a year prior. As showrooms reopen and private buyers resurface, used car values are at their highest point since April 2009, with the average car subject to a further £250 increase on its market value against June 2020.
Indeed, we likely find ourselves at a crescendo point for used car values in the UK, where post-lockdown demand is surging while supply struggles to catch up. Of course, those supply challenges won’t last forever, and the smart money suggests used car transactions will soon get back up to speed. So, if you’re wondering when the time to strike a sale is, it would appear now rather than later is the time to cash in as a used car owner.
Should you sell your car to a dealership or privately?
Selling to a dealer against selling privately essentially comes down to a question of reliability and convenience versus maximising sale value. If squeezing the most money out of your sale is your priority, then a private listing will likely garner more than a deal from your local showroom.
However, one thing to consider right now is the time-sensitive nature of the current seller-friendly market. With dealerships offering a less time consuming, lower hassle and sure-fire method of selling, it could be in your interests, even financially, to secure a quick deal with an authorised trader over seeking out a private buyer in a potentially drawn-out process.
Value your car for free with our used car value calculator
With used car values in the UK at decade-long highs, you may well be thinking of taking advantage of the current market. Of course, the first step is to get an idea of how much your car is worth, and you can find out for free with our used car value calculator. All we need from you are a few basic details on your car and yourself and we can give you an estimate to use going forward with a dealership or private sale, as well as where you might stand in a part-exchange deal for a new car.
If you’d like to know more about the market right now and where you stand, please don’t hesitate to get in touch. Alternatively, take a look at our current new or used car offers, or find a dealer near you today.
