The last few months of 2023 were difficult for used car prices. Values fell several times, cooling after an incredible 3+ year period of growth. It will have been a stressful time for sellers, dealers, and anyone who offers a car broker service. However, experts are more positive now.
A more sensible market
According to dealer group Vertu, the prices of second hand vehicles appear to have come back to a sensible level. The final three months of last year saw them drop by 10.3%. But, there has been more stability since then. Values are now nearly back to normal levels.
In addition, Vertu noted that the last five months have been relatively good for demand. The like-for-like volume of used cars was up by 0.8% across the group.
The differences
Before the Oct-Dec 2023 period there were several factors forcing up the price of second hand cars. It was a great period for sellers, with some people able to make hundreds or thousands of pounds more than they would usually on the vehicles. Anyone offering a car broker service will have had a busy time helping dealers find cars.
Crucially, there was a huge restriction on the supply of new cars because of a shortage of semiconductors and labour. So, a lot of people had to go for a good used car instead. Supplies have recovered now, but some dealers are struggling to sell them. In fact, figures suggest that new car orders are below what they were in March 2022.
On top of this, the wave of demand post covid has come to an end. Around three years ago people began spending all the extra money they had after lockdowns restricted them from going on holiday and enjoying leisure activities. Many people chose to buy cars, resulting in a lot of demand and pushing up prices.
More recently there has also been the cost of living crisis and increases in interest rates. As a result, more people were choosing cheaper second hand vehicles.
Finally, there is uncertainty about new vehicles, especially EVs. With that in mind, a lot of buyers go for the comfort of familiar older vehicles.
What next?
It will be interesting to see where the market goes from here. If Vertu is correct and it has stabilised, prices may remain at the current level for the next few months. This will be a comfort to many dealers because it will mean there isn’t another big dip in values.
However, further cooling could occur. A number of factors could cause this, including rising fuel prices. Political uncertainty in the lead up to the General Election and high interest rates can also have an impact.
Do you want to start your own car broker service?
Whatever happens, the second hand car market in the UK is massive. There are plenty of opportunities for people to make good money here, whether it is sellers, dealers, or car brokers.
If you want to start your own business, a car broker service could be the best choice. You don’t need a huge initial investment, especially with our cost effective business package. Plus, you will never be buying cars for dealers or private buyers. So, you won’t ever be taking financial risks. You can earn a nice commission for every suitable car you find for clients.
You can learn more about broking on our website and get a better idea of the products we offer. In addition, if you have questions or would like advice, you can contact us.
