Price of used cars soars €2k because of supply shortage
THE value of second-hand cars has soared by up to €2,135 in three years as more buyers compete for fewer models.
A survey has found that three-year-old cars last year were worth €2,135 (18pc) more than their 2010 counterparts. And five-year-old cars went up in value by 27pc (€1,732).
Even 10-year-old cars are affected, with prices up 32pc (€681). Normally cars of that age would be regarded as near-finished, and receive limited buyer interest, but widespread demand has re-valued them.
Two of the best-known names, the Nissan Micra and Toyota Yaris, are now worth €1,000 more. Such price rises will come as bad news for first-time buyers and older motorists trading down.
It appears two factors are at play in the price spiral:
* Fewer people have traded in cars since 2008 because they could not afford to buy new – reducing the supply.
* More people are either back in the market or buying for the first time as the economic outlook improves.
The Motorcheck.ie research compared the sale prices of more than 12,000 cars over four years.
Michael Rochford of Motorcheck says the figures are "shocking, but perhaps not entirely surprising".
He explained that when the new-car market collapsed following the 2008 financial crash, used-car values hardened because fewer were coming on the market.
"Because we weren't buying very many new cars, there wasn't enough throughput of good, used stock into dealer forecourts and the classified ad pages. That scarcity drove up used values." And there has been a trickle-down effect to older models.
Mr Rochford adds: "It's quite extraordinary that we are witnessing a hardening of used-car values to this extent. This was widely expected to happen . . . but I don't think anyone imagined it would trickle down to cars of 10 years or older."
He warned that the increase in values brings its own danger as unscrupulous traders may attempt to capitalise on the scarcity by selling 'clocked' cars or vehicles that have previously been written off.
Additionally, it is now expected that UK imports will rise even more sharply this year.
The used-car market may start to stabilise later this year as new-car sales are running roughly 26pc ahead. That means more trade-ins are coming on stream.