Experts predict used car values to remain steady in 2021
Used car values are expected to remain stable in 2021 according to industry experts, despite the uncertainties of COVID-19.
Since 24 April, finance companies and credit lenders have been unable to repossess vehicles due to missed payments in light of financial hardship due to Covid-19. The effective ban from the Financial Conduct Authority (FCA) was due to end on 31 October, but was extended in November until 31 January 2021.
In short, this means that the ending of the near-nine-month ban could lead to an oversupply of cars on the used market from the repossession backlog, driving down values. However, experts have told HonestJohn.co.uk that the market is expected to remain strong in early 2021 because the vehicles won't hit the market all at once.
Director of Insights at Cazana, Rupert Pontin, said: "Despite the anticipated increase in volume in the market, at this stage the data reflects the positive market outlook.
"Consideration must be given to expected consumer confidence in the wake of the vaccine news and the fact that the early months of the year are traditionally good used car months. In addition, whilst vehicles may be repossessed from 31 January, it will take some time to follow process and actually physically collect the cars and get them in to market.
"Couple this with a weaker than expected new car market, in part for supply reasons, and used car demand looks at this point to be able to cope with the extra volume. At this stage Cazana does not believe that retail pricing in the first quarter of 2021 will be significantly adverse to normal Q1 conditions."
Pontin noted that it was hard to identify the volumes involved with any certainty, but said some lenders have warned remarketing companies and auction houses that they expect a significant uplift in repossession volumes and cars needing to be sold after January 2021.
Automotive experts cap HPI said it expects the entire used car market to come "under pressure" as the economic recession and rising unemployment starts to hit home and affect consumer confidence, while at the same time the volume of used car supply will increase.
However, it said the repossession backlog will take several months to process, which means it will not cause short term distress to the market.
The Finance & Leasing Association said: "Used car prices go up and down, but in a predictable way. While we do expect used car prices to go down in 2021, we expect any falls to be less sharp than in the last recession in 2008."
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hissingsid on 2 December 2020
Would these be the same "experts" who during the first lockdown predicted that used car prices would fall, then a few weeks later that they would rise?malcolmghenderson on 2 December 2020
If you look at Gumtree for instance, and bearing in mind the economic impact of COVID, I think people are over-pricing cars by a long waymadf on 11 December 2020
I watch car ads as I want to change cars IF I can get the right price.
Most of the cars I look at have been for sale for months. I expect them to remain there .. for more months before the price is reduced.
Compared to two years ago on a like for like basis, there has been approx a 20% price rise. I am waiting for that to unravel. It will take months.
I can wait.
MykiMyk on 2 December 2020
watch the unemployment data, that will be the true guideyokohamapete on 2 December 2020
So much easier to add it all to fuel tax. Good for the environment, good for balance of payments, easy to collect, encourage careful driving, no big brother watching where we are. It would encourage use of PTWs when the weather is decent. SimplesLinsoo on 2 December 2020
so the 'director of insights' answer can be summarised as 'I dunno really'
Edited by Linsoo on 02/12/2020 at 17:56
TonyWG on 3 December 2020
With the Road Fund (tax) being as it is nowadays with some vehicles I would expect a high demand for blue tax free diesels, 20 pounds a year 3 cylinder small cheapies marketed under Toyota, Citroen, Peugeot etc; and low emission 30 pounds tax bargain diesels with a good carrying capacity such as Renault Grand Modus etc. As a lifetime DIY motorist I expect hopefully to be able to buy cheapies to work on myself, and then a small EV in my final years.
Edited by TonyWG on 03/12/2020 at 13:05
Tony Mahon on 3 December 2020
Regarding the mileage pricing suggestion. I would benefit because being retired my mileage has dropped greatly and I have a pretty good bus service. However not all the people living in rural areas are well off, far from it and when I was lucky enough to have a Static caravan in a South Lakes village, there were 2 bus services a day. So in that area it was normal to offer a lift to anybody " Thumbing " and if you did have a car then you would be paying much more than me for the mileage you would necessarily incur.Avant on 13 December 2020
Are you able to value my car as I am considering selling? It is a Mercedes S 350 Blue tech auto saloon bought new in Jan 2014 and has done just 6100 miles with no short trips as a runabout. Virtual show room condition with full Mercedes service history. Tracker fitted. Having lost my wife who died recently, I no longer wish to use it.(Posted by Avant on behalf of a reader whose post appeared as 'reported as offensive' which of course it isn't. Very sorry to hear about your bereavement.)
charlie williams on 8 January 2021
I case of selling my car in 2021 its effect the value of my car?driverfox on 9 January 2021
I agree nothing much will change with use car market due to restrictions.Only the way you buy used car because of this stupid lockdown.
Im interested buying a car has anyone used any used car inspection companies before-or will you be using it? What is better AA, Rac or CarExamer inspection?
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