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Why your car is holding its value better this summer  

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The number of used-car transactions is up 25pc compared to June last year

The number of used-car transactions is up 25pc compared to June last year

The number of used-car transactions is up 25pc compared to June last year

Your car is likely to be holding on to its value better than would normally be the case.

That is good news for motorists thinking of buying a new car in the near future.

However, it may not be so good if you're buying a newer, second-hand model because, naturally, those cars are also holding value so the benefits may cancel each other out.

There is no denying the fact that there is strong demand. I've been in a couple of garages recently and that was definitely the case.

My report about growing demand for used cars, published a couple of weeks back, prompted car-trends expert Michael Rochford, managing director of Motorcheck.ie, to check in and offer some further analysis of the variety of factors at play this summer.

Based on what he is observing on his history-check website business, he claims it is not so much that used car prices have risen or will increase in value. Rather, he says, it is a matter of cars not depreciating to the same extent as they normally would. 

Of course the extent of this trend varies from vehicle to vehicle and will depend on demand and supply to a large extent.

Mr Rochford said that normally the biggest single shift in used-car prices occurs over the December-to-January period when the market goes from low-sales volumes at the end of the year to high numbers in the new year.

That's when a typical used vehicle 'magically' becomes one year older almost overnight.

"What we are seeing now is that vehicles are advertised for sale at the same values and, in some cases, higher values than they would have been in Q4 (the last quarter) of 2019," he said.

In other words, and generally speaking, a 2017 model is costing as much to buy now as it would have in the final quarter of 2019.

Asked if there is a conscious swing by buyers away from new to used cars, he is not convinced there is. There are a number of elements at play.

Proportionately there are more people buying used cars due to the fact that new vehicle sales are well down on last year partly because of the lockdown effect - especially on the July market.

On top of that, and anecdotally, there are many people buying fresh used cars who don't want to use public transport because of Covid-19. All of this is fuelling demand and holding values. 

"In addition people have cancelled holidays and have not been spending for three months so many are now seeing this as an opportunity to change their car.

"Some are opting for used cars and some are opting for small new cars with a low monthly PCP deal."

The number of used-car transactions is up 25pc compared to June last year while new-car buying is down 20pc this month.

And what if demand continues to outstrip supply?

Mr Rochford reckoned there could be acute demand for the next three/four months which will likely have the knock-on effect of driving up used-import buying.

In conclusion, he said: "If the movement of used cars between the UK and Ireland continues to be restricted and does not bolster the supply of indigenous stock, we may eventually see a more pronounced shortage of used stock and a further hardening of prices.

"If things continue at current rates to the end of year we are probably looking at a 10-15pc increase in used-car transactions. However, at this point it is hard to say."

Indo Motoring