Used-car prices jump 25% and could rise further, says Glass’s

Despite an unprecedented 25 per cent rise this year in prices of cars up to one year old, Glass’s is urging would-be car buyers to buy now. Used car stocks have dwindled to an all-time low, prices may go still higher, and the choice of vehicles is likely to become even more limited, predicts the publisher of trade pricing ‘bible’ Glass’s Guide.

“The remarkable and unparalleled recovery in prices since January might appear out of step with a depressed economy, but in reality the higher prices stem more from the limited supply of used cars rather than a significant increase in retail demand,” says Adrian Rushmore, Managing Editor of the Guide. “Consumers should be warned that prices are not expected to fall in the coming months, as the supply of vehicles becomes even more constrained.

“Since the third quarter of 2008 the very depressed new-car market has seen fewer cars registered – particularly as short-term rental vehicles and dealer demonstrators – leading to an all-time low in the supply of younger cars for sale. Consequently prices have risen, in line with the laws of supply and demand.”

This pattern has been repeated in the market for older second-hand cars, where similarly limited supply has driven up prices despite the economic downturn. Rushmore comments, “The situation for used cars of any age is not expected to change until the middle of next year at the earliest, so consumers should move quickly to have the best chance of finding the models that meet their needs.”