August 2023 saw a continuation of the impressive performance of prices for used cars in the UK. According to Auto Trader figures, they were up by 1.1% on the same month in 2022. That is good news for every car broker and dealer, showcasing there is still plenty of interest.
The wider picture
If you look more broadly, you can see the month was a good one for values. While the growth was smaller than previous periods, it was still heading in the right direction. Most importantly, it comes up top of those massive increases. For example, growth in 2022 at this point was 15.6% year on year. In 2021 it was even bigger at 17.2%. So, overall now prices are 36.9% above August 2020.
Some will look at the fact that August 2023 growth was 1.1% while July was 1.9%. While that is 0.8% lower, it follows the seasonal patterns we normally see at this time of year. August can be slower because people are waiting for the release of new number plates in September. As a result, there is a dip in activity.
It is also worth noting that there were two key constraints here holding back used car prices to an extent. Every dealer and car broker should consider them.
Firstly, prices of second hand EVs continue to fall. They were down by 22.6% in August. Simultaneously the supply was up by an astonishing 97.4%. That had a massive impact on overall prices for used cars.
Secondly, there was a dip in the value of newer second hand cars. Vehicles up to three years old saw their values fall by 3.5% year in year and 0.9% month on month. This was mainly because of an increase in supply and higher consumer demand.
What does it mean for the future?
There has been a lot of speculation that the used car market is heading for a price crash. However, the current data shows there are no signs of it happening at the moment. Even with new car supplies increasing, demand for second hand vehicles is still strong. It is keeping values up in many pockets. This is particularly true with older cars.
Have you thought of becoming a car broker?
With the market becoming more challenging, more dealers will likely want to work with expert brokers. These relationships can help them to source vehicles with the best chance of profit potential. Primarily these will be petrol or diesel cars 3+ years old in great condition and with good mileage.
If you want to become a car broker, we can help. We specialise in providing materials for setting up broking businesses. They make it easier to learn about the industry and how to organise everything. There are also modules for things like how to find vehicles and how to value them. You can learn more on our website and order what you need. Or, contact us for more info.