What are the Opinions of Experts regarding UK Used Car Sales?
Expert Opinions On The UK’s Used Car Sales in 2022
While this year is not likely to be as strong as 2021, automotive professionals believe it will still be robust for used cars with unstable prices and tremendous customer demand. The shortage of semiconductors and unwillingness to leave cars for public transport are two main aspects of the high demand.
At the end of last year, Cap HPI and Auto Trader spoke to Car Dealer and predicted a fall in price for November and December. However, that wasn’t due to higher supply; instead was typical seasonal behaviour.
Will the used car prices drop or continue to grow? Will we see a price crash soon, or 2022 will again be a fruitful year for vehicle trading?
Some of the UK’s automotive experts voiced their opinion about it. Let’s find out what they say:
Dealers will concentrate on margin and income.
Cox Automotive says the 2022 market will not be able to go back to pre-COVID standards. However, the dealers will still see robust demand with low supply, but discounts won’t be available. The new stock is less likely because semiconductor and raw material scarcity will not be normal until around 2023. Nevertheless, prices will not rise or decline at the same rate to 2021 owing to demand and supply imbalance.
Price correction will not come quickly.
Editorial director What Car? Jim Holder says the price correction is highly likely, but the demand will not decline abruptly until the supply improves.
It has been about three years since we saw a limited new car supply, and with a lower supply of second-hand cars, their demand will remain robust. Notably, it will happen due to buyers not willing to take public transport and wait for the delayed brand-new vehicles!
The things won’t settle within a month; it will probably take years to come to a pre-pandemic state.
A bubble burst will not happen soon.
The last year ended on a high note for an automotive market where second-hand cars witnessed double-digit growth. This year the market will build on the advantages made in 2021, said Richard Walker, director of data and insights, Auto Trader. According to a report, the typical cost of a second-hand vehicle was more than £20,169 for the first week of January 2022, which is 28 per cent higher Year-on-Year on a like-for-like basis.
The two main reasons for the rising prices are the limited supply of both new and used cars as well as the healthy consumer requirements.
In reality, the Auto Trader survey tells 33 per cent conceded that vehicle possession is now more vital than it was before the COVID-19. We won’t see a bubble burst anytime soon.
2022 is likely to see robust prices
Alex Wright, managing director, Shoreham Vehicle Auctions, said that after a subdued Christmas auction in the first month of 2022, we sawa conversion rate of 85 per cent. However, the demand wasn’t as strong as it was in the 3rd- and early 4th quarter of 2021.
For now, the dealers have to compete sensibly, filling the available stocks at the current prices or sticking to what they own. The former seems more reasonable to keep the ball rolling.
However, in 2023, we expect to see more used cars entering the market, so prices will likely decrease gently.
Car requirements will remain high.
Phill Jones, head of eBay Motors Group, stated that their group had seen robust enquiry levels this month, especially after the PM's decision not to implement more restrictions.
With an ongoing low supply of new and used vehicles, the requirements will remain high and stable for some time to come.
Famous second-hand vehicles may sustain their price longer than usual
Second-hand vehicles witnessed exceptional price growth in 2021, and some cars even went up in value with age. The used car prices can’t always go up, and they will stabilize in the coming months.
Until the demand cools down, the prices of some second-hand cars will sustain their value for more time than usual.