Second hand cars - when are prices going to start coming down?

[StopFeckingFaffing]

I think I understand all the reasons why there was such a hike in the cost of second hand cars in the past couple of years

I am seeing plenty of new cars on the roads now so assume production and sales are starting to return towards pre-pandemic levels but price of second hand cars still seems very inflated

My car is a 2010 model so worried it will need replacing in next 12 months or so but I would ideally prefer to avoid buying anything newer (I would normally look to buy something between 1 and 3 years old) while second hand prices are so high

Just wondering if anyone works in the industry and can offer any wisdom?

Ex dealer here. DH still in the industry. The semi-conductor issues knackered the market and this is why 2nd hand cars are so expensive. That has now been resolved. There is however still supply chain issues which is why some cars still aren’t being delivered. However there are many dealer groups who are massively overstocked at inflated prices but will have to do something to de-stock before they announce their financial results or reach year end. This may mean that prices will come down in the new year but most likely by march with the new plate change when manufacturers will be under pressure for registration. It isn’t really easy for dealers just to reduce their prices without shareholders agreement as the losses could be quite substantial hence the gradual reduction you might be seeing. The screen price is not indicative of the profit, most used cars have an average profit across the board of c£1500 but can be up to £4k ish for some (but not all) premium brands. HTH

We both need new cars. We are looking to buy one that arr around 5 years old
We have been keeping an eye out for the last 6 months. The same cars are still for sale but the price never changes
Are they willing to accept offers? We'd be buying cash not sure if this makes a difference
Everything we have seen seems so over priced. The only ones that seem reasonable are the private ones but we'd rather buy via trade
We're not desperate. Both our cars are old but both passed MOTs and in reliality we don't do loads of miles as both wfh but we do use them daily and do both need one

I went with Cinch, because I'm not very well at the moment and couldn't face trooping round showrooms and having conversations with salesmen.

Am very happy with my secondhand Volvo V40, drives beautifully and everything works (I checked everything the day it arrived )

ULEZ is coming to London suburbs and most older cars will be scrapped or sold for very little. This I believe will keep prices up in Greater London next Summer

Agree with comments above from
The ex dealer.

We have a small independent dealership - about 60 cars. Our stock is mainly good quality cars 1-6 years old £4000 up to about £40,000. I mean prices are decreasing now in what we would consider a normal manner, however as they went so a stupidly high around November last year, they're now depreciating from a very high starting point.

I'd say garages that aren't price changing are very short sighted, we do it weekly. It means we might not make as much profit however we sell a car and then we have a space and cash for another car which might be a little cheaper and have more margin across it due to depreciation.

I would definitely say have a look and make offers. All dealers are different. Some places price them high with a view to offering big 'discounts' if asked. We don't we price them reasonably and price check and reduce weekly if needed. However we still discount sometimes if it's maybe a car we have had in stock ages with no interest, even it means making a loss. So it's always worth asking!

Also you say you have a 10 year old car? If it's a good car with good history etc, then you might be in a good position as smaller garages will want that for a part exchange, so may possibly offer discount on your new car. We must get asked twice a week 'what have you got for under £4000' and right now the answer is 'not a lot'. Decent standard older cars are hard to find. We could sell you 10 Audis or Mercedes at £25,000 however!

Thank you @Netaporter and @toomanydicksonthedancefloor1 that is really useful information

I'm nowhere near London so ULEZ is not an issue

If you're doing minimal mileage - and have a good, reliable mechanic/garage looking after it then it's very much worth considering keeping it longer.
It's also worth it, if you don't already do so, in learning to do simple upkeep jobs such as checking your lights are all working and knowing how to change a lightbulb in your car. (honestly my oldest brother is that useless I have to do that for him). Check your tyre pressures regularly and check tyres for wear and tear and replace as necessary etc.
I'm lucky in that DH does ours, we have cars that are 23 years, 10 years and 5 years old. We present them looking immaculate inside and out and clean underneath and never have so much as an advisory let alone a failure. Keeping an older car doesn't necessarily mean additional costs if you look after it - we don't use them harshly , we drive gently and economically meaning less wear and tear. The main cost of replacing is depreciation - although our 23 year old car has actually appreciated in price and thefts of the model are rising (don't make them like that any more!). The advantage of keeping a car a very long time is we know the car and know it's going to be good to go with no hidden problems likely to come to light.

That is my plan @Ariela, I won't be changing my car just for the sake of it and assuming it gets through its annual service and MOT without any major work required then I'm hoping to keep it going for as long as possible

I do need a reliable car though so am just being realistic that at some point it will need replacing with something newer

I've just agreed to return my not even 2 year old car back to the dealer for a new car. I would have changed it in the next year or so anyway and I get a good deal on a new car and they get a car for stock that is in very good condition and low mileage. They simply don't have enough cars in stock to sell at the moment - everything is showroom new or built to order so they are losing passing trade so to speak.

I bought a high mileage car from a friend's brother who was returning to his home country six years ago, for peanuts a little more than he was offered by webuyanycar, and still have it. The mileage is average for the year now and it's still worth nearly as much as I paid. I would never buy a new car.

If you are selling one car to buy another it’s going to make very little difference as your car’s resale value will also have gone up.

I'm not sure about that @mum11970 coz I'll be selling a 13 year old banger and looking to buy something at least 10 years newer so I'm guessing the price inflation for a 3yo vehicle is going to be a lot more than for a 13yo one!