Used cars prices drop - and will continue on that road

As new car supply improves and customers return their part-exchanges, giving more used car stock availability, price realignment continues pushing used car prices down further. In the middle of October Cap HPi’s data showed the average value of used cars was down another 2.1 per cent with its value experts expecting another one per cent fall across all used car types by the end of the month.
Director of valuations Derren Martin said: “By fuel type, electric vehicles have been tough all year – although saying that, they are now dropping by less than petrol and diesel. Within that you have some best performers that have increased a couple of points such as BMW i3, Nissan Leaf, Peugeot e-208 and the Renault Zoe.”
Some cars have dropped between five and six per cent due to increasing volume in the market, impacting values of the Kia ev6 and the Mercedes EQA, EQB, EQC, and EQS. In the SUV segment the average of the premium brands dropped between four and eight per cent.
There has also been a drop off in demand as a result of inflation and interest rates remaining high combined with some attractive offers on new cars as production and supply improved.
Martin predicted that the same downward trend for used vehicles would likely persist for the next couple of months until the year end.
There is more evidence that rising inflation is putting pressure on motorists as a major supplier reveals that demand for maintenance plans payable by monthly instalments has increased by over 1000 per cent in the year and are set to overtake one-off fixed term payments for the first time. Maintenance plans cover services such as extended warranties, scheduled servicing, brakes, wipers, batteries, tyres, alloy wheels, SMART bodywork repairs and breakdown assistance.
“The first three quarters of this year have seen a significant year-on-year increase in demand for maintenance plan subscriptions, which we believe is a result of new and existing clients adapting to rapidly changing financial and regulatory market condition as well as renewed focus on longer term aftersales income said “Serkan Obuz, EMaC’s director, maintenance plans.
“This has been further accelerated by increased finance rates and restrictions from lenders making it harder for many buyers to afford one-off fixed term payments. With consumers able to access monthly payments and subscriptions across many retail sectors, car retailers are now in a position to offer a more affordable payment solution that resonates with their customers."
With energy prices also rising motorists, particularly in rural areas such as Devon and Cornwall, will be watching fuel prices and looking for stations offering the cheapest rates as the possibility of volatile movements over the next few months seem likely. Inflation rates are affected and the hope is that both inflation and interest rates will continue to fall between now and the end of the year allowing the government to give the tax cuts promised. In the meantime, keep your eyes pealed for genuine offers that can save you money until the economy improves.