Depreciation is back! Used car prices fall £850 with more to come but avoid this error | Personal Finance | Finance newsbhunt

That was down to supply shortages, triggered by lockdowns designed to stop the spread of Covid, which hit car production hard. With new cars in short supply and deliveries arriving months late, motorists were forced to buy secondhand, driving up demand and prices.

Some owners have even sold their used motor for more than they originally paid a whole decade ago.

The valuation of a used Hyundai Santa Fe climbed nine percent in 2021 and another 20 percent last year.

The prices of a Mini One rose eight percent and 20 percent over the same period, according to used car platform

Normal service has now been resumed with used car prices finally beginning to fall as vehicle production returns to former levels.

This is good news for buyers but it also means that anybody selling their car has to work harder to get a better deal.

The average price fell 4.2 percent in October, according to used car pricing experts Cap HIP, marking the biggest monthly drop in 12 years.

This wiped £850 off the average value of a three-year-old used car with 60,000 miles on the clock.

Now that trend has started to reverse with prices falling 4.2 percent in October, the largest drop in a single month for more than a decade, latest figures from vehicle check service Cap HPI show.

That is good news for buyers and a further sign that cost-of-living pressures may be easing, with inflation falling sharply last month, too.

Cap HPI director of valuations Derren Martin has called it a “market realignment” with values dropping a total of 13.6 percent since April and a further sizeable drop expected this month, too.

However, sellers are making things harder for themselves as Auto Trader figures show 14 percent of used cars are advertised below their market value, Martin said.

This is a costly and unnecessary mistake because it means “potential profit is still being left on the table” by sellers, he said.

Martin is backed by new research from used-car marketplace Motorway, which shows that four in 10 Britons do not know know how much their car is worth and risk losing hundreds or even thousands of pounds when selling online or to a dealer. 

More than 4.2 million Britons have a car they do not use and more than half are unaware of the untapped financial value sitting on their driveway, Motorway co-founder Alex Buttle said. “Although used car prices are now falling they are still around 25 percent higher than three years ago.”

Buttle said many find selling their car causes stress and social anxiety, and do not get a good deal as a result.

He said start by doing your research, to see what similar cars go for, taking into account make, model, mileage and so on. Free online services such as Motorway’s Car Value Tracker can help you work out what your car is worth.

Then prepare to haggle a little, but instead of feeling intimidated, treat it more like a game rather than a confrontation. It’s not always easy for Brits, but haggling can be fun if you don’t take yourself too seriously and get into the swing of it.

READ MORE: Used electric car prices have considerably fallen with models £25,000 cheaper

Buttle said too many used car sellers miss out on the best price by failing to carry out simple tasks like buying new floor mats, cleaning their car interior and wiping down food stains before marketing their motor.

Sellers can also add value by replacing old window wipers, cleaning the tyres, changing the oil, making small repairs, fixing damage to bodywork and giving the car a polish.

For more expensive cars, replacing key features such as alloy wheels with brand new ones could drive a much better price, Buttle said: “The better the car looks, the easier it will be for a dealer to imagine the car sitting on their forecourt.”

Used car sellers may find it tougher to get a good price but do not give up. Auto Trader’s director of data and insights, Richard Walker, said despite recent dips buyers are out there. “Transactions are stable, consumer demand is robust, cars are selling quickly, and there are still segments of the market recording strong price growth.”

Used car buyers and sellers should do their research to make sure they are driving the hardest possible bargain today. And don’t be afraid to haggle – it can even be fun if you do it in the right spirit.

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