It’s a prediction based on guesswork, but I’d say that used prices won’t drop significantly until new car supplies improve. Following the whole renewal cycle being out of kilter following Covid and microprocessor shortages, the entry into the market of part exchanges is diminished, causing a knock on effect all the way down the chain.

I think we've yet to see the effect of low mileage due to Covid lockdowns, some doing only nominal mileage for nearly two years so I reckon that many will keep their car for another couple of years instead of changing at 3 years old, thus inflaming the shortage caused by low new car sales.

Car prices are now following house price trend :-(

10% up and 1% down.

New-ish car prices are still very high!

Reasons I can think from top of my head

• chip shortage, fewer new cars being made
• higher demand - people avoiding public transport
• people moving out of London to countryside, need cars since no public transport
• people saved up money because could not go on holiday - leading to car price inflation
• manufacturers are turning every car into SUV, which costs more in the first place

And the news that a fire in a major chip factory won’t help matters

We bought the Pulsar 1.6 DIG-T in February 2018, nearly 4 years ago. The dealer was clearly not going to let us walk away without a car and we made sure he paid for his transparent need to have our money. The car should have cost about £19,000 including paint and service pack, we paid about £12,250. Other members on the Pulsar forum said we were mad since the car would be worthless when we came to sell it but that discount made it worth the risk. What Car estimated it would have lost 68% of its original value by its 3rd birthday, £6080, a dreadful loss on list but on the price we paid acceptable to us.

4 years on we are looking at changing (again) but its difficult since new cars are way more expensive now. The closest in terms of power, size, kit etc, is the Kia Ceed 1.6 GT and the best price I have seen on that is £23,000 (plus paint), virtually double what we paid 4 years ago.

Just had a look at on-line valuation sites and the PX for the Pulsar looks at being about £7500 but that is for one with 40,000 miles, ours has nearer 25,000. Retail is about £10.000 but again that is with 40,000 miles.

So in 4 years we would have lost £4500 if the valuation is correct, would be happy with that but the price to change would still be an eye watering £15.500.

Looked on Autotrader and there are no 1.6 DIG-T's on either a 2017 or 2018 plate. A 2018 1.2 DIG-T to the same spec/ but a few less miles is priced between £10,400 and £12,000.

Totally crazy.

A couple of years ago the average new car lost 20% of its value as you drove it out the showroom. Three years old and trade in would be 35-45% of original list price.

Today the typical 3 year old car is valued at 20-30% off original price making them seem expensive. New car prices have increased making the cost to change no better,

Personally if you need to change I would be inclined to lease. Selling a (say) three year old car will generate a decent amount of cash.

A lot is currently unclear. Covid, supply chain and chip disruption, which manufacturers will lead the way, the impact of the transition to EV etc. Make the wrong call now and you will be paying a premium price for a car which will depreciate rapidly.

Leasing removes the risk. In 2/3/4 years time any decision is far more likely to be based on rational data.

Leasing also is cheaper per month than PCP - there is no certainty that there will be any equity at the end of the PCP contract - so why pay the premium price to increase the risks.

The above is but an opinion and may not be right. But it does avoid risk and increases certainty.

When I sold the I'll fated Stonic; cazoo valued it at£17075. but then didn't buy it as less than 3 months old.

I got £16750 from one of the other buyers but wbac were less.

I don't think the market will settle for a long time.

I can understand the emotional argument. But whether there is any equity left in the car at the end of a PCP contract is a risk.

Legally you may own the car. To to keep it past the end of the contract term costs money

FWIW my 67 plate Golf GTI is down £2,000 since I last valued it in October according to Autotrader. So maybe things are easing a little.