Has Covid-19 driven up the value of used cars?
It was probably an unexpected result, but it would seem that the events surrounding COVID-19 may have driven up the value of your used car.
There could be a few reasons for this, one being that many commuters want to avoid public transport and so opting to purchase a second-hand car. Others may be taking advantage of deals.
It would also seem to be the case that many have made some savings while on lockdown, by less spending on commuting, clothes, eating out, entertainment, holidays and other savings elsewhere.
The extra demand means that there is a shortage of used cars on the market and this has seen the value of your car actually going up over the last few months.
This is really good if you are the seller, as you will get a better price for your car than you normally would, however it may not be as good if you are a buyer as you are paying a little more for a second hand car right now.
There is no denying that there is a strong demand right now for used cars. There is massive uncertainty in the global markets due to the lockdowns. Consumers are hedging their bets and are not willing to get into debt to buy a new car.
So are used cars increasing in value? Wll in some cases, there may be an increase in the asking price but it is more a situation where certain car prices have not depreciated as much as they normally would have in this period.
Cars seem to be holding similar values to the last quarter of 2019, even though they are a ‘vehicle year’ older.
For many, making savings over the two months of the lockdown and the hesitancy in purchasing a new car during uncertain times are major factors in the stable used car prices.
For the most part, used car sales are up, and new car sales are down compared to the same period last year. Anecdotally, Car dealers are already having difficulty in sourcing good quality used vehicles due to the shortage and this may continue for some months more.