Motorists can take advantage of the spurt in the prices of used cars by selling their unwanted vehicles for a bumper profit.
Average prices have jumped 20 per cent since April, with even family cars charging a hefty premium.
This jump in prices is due to a severe shortage of new vehicles – and a significant number of buyers, armed with extra money they didn’t spend on an overseas vacation.
Darren Martin, head of valuation at motor analyst Cap HPI, says anyone with an unused car should take advantage of it. He says: ‘If you have a car you don’t need, now is the time to sell.’
The latest data from CAP HPI shows that the average price of a second hand car has increased by one fifth in the last five months. Normally, they would have depreciated 5 percent over the period.
Buyers who want to replace their vehicles post-lockdown and the lack of new cars due to a global shortage of semiconductors are causing prices to explode.
‘It’s a perfect storm of strong demand and supply issues,’ Martin says. ‘The prices of used cars have risen wildly since showrooms opened in April – and they are rising again.’
This month is expected to see the biggest price increase since May, which means sellers have a chance to make even more profit.
Some cars have experienced extraordinary price hikes. The Toyota Auris Hybrid, for example, has grown in value by 47 percent over the past five months to nearly £17,000.
It is based on a three year old car with 30,000 miles on the clock. Over the same period, the Mazda MX-5 has grown by 45 per cent to around £20,000, while the Mercedes-Benz C Class Cabriolet has risen 44 per cent to nearly £30,000.
Other three-year-old cars include the Vauxhall Mocca, Mercedes-Benz V-Class diesel, Vauxhall Zafira and Volkswagen Beetle convertible with more than a 40 percent increase.
Black Cars Leading to the Second-Hand Boom
According to the Society of Motor Manufacturers and Traders, the country’s used car market grew by 109 per cent in the second quarter of 2021 as compared to the same period last year.
It said 2.1 million vehicles changed hands – a figure of about 7 percent in 2019 even at pre-pandemic levels.
The Ford Fiesta was the most popular car, followed by the Vauxhall Corsa and the Ford Focus. Volkswagen Golf, Vauxhall Astra, BMW 3 Series, Mini, Volkswagen Polo, Nissan Qashqai and Audi A3 rounded out the top ten.
Black proved to be the most popular car color, followed by silver/aluminum and blue.
The society’s chief executive officer, Mike Howes, says the figures show how strongly car transactions have made a comeback after a nationwide lockdown that closed dealerships.
He says: ‘More motorists are turning to used cars as supply constraints are having an adverse effect on the new car market.’
In some cases, six-month-old cars with 5,000 miles on the clock are changing hands for more than new ones cost, because newer models simply aren’t available.
For example, a new Dacia Sandero will cost just over £10,000, but used models are fetching over £12,000.
The same goes for the Toyota GR Yaris and Tesla Model X.
Richard Bartlett, director of car dealership Bartlett Seat in Hastings, East Sussex, is sourcing vehicles remotely from Scotland.
“The supply of used cars is tight, so we are traveling further and paying more to sell the cars,” he says. We are also facing competition from online marketplaces.
He adds: ‘If you had brought the four-year-old Seat Alhambra people carrier to us in March, it would have cost £13,050. Today, the live price is £18,650.’
There are drawbacks to the used car boom. Selling a vehicle for a profit only works if you don’t need to replace it – even a replacement car will cost more than it was six months ago.
The easiest way to sell your car is to trade it in when you buy a new car – or sell it to a car buying service. But selling privately should get you a better price, assuming you can find a buyer.
Motoring group AA advises private sellers to make sure their car is well presented, with any minor paintwork damage repaired, because first impressions count.
It further added: ‘Make the buying process hassle-free. For example, get a new MOT and make sure you have complete service history of the car – many buyers ask for it.’
As valuations rise, search online and talk to local dealers to find out how much they are willing to pay for your car before making a final decision.
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