New research has found that car prices have “fallen off a cliff” as the cost of buying a used car has almost halved over the last seven months.
Since May 2023, petrol vehicles have lost 30 per cent of their value on average, compared to 24 per cent for electric vehicles.
The average buy-now price from the researched cars has seen petrol vehicles drop by almost £6,500, and electric ones slightly less at £4,573.
Drivers looking to sell their Range Rovers may be surprised to see a staggering 44 per cent decline in value in just seven months.
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Used car prices have been described as 'falling off a cliff'
PA
This is the biggest drop in price for petrol and electric vehicles, with the Kia Nero EV plummeting 41 per cent, the Mini EV seeing a 37 per cent drop and the value of a Renault Clio falling by more than one-third.
According to the research, prices of electric vehicles are dramatically decreasing with fleets flooding the market with second-hand models.
The Polestar 2 buy-now prices have fallen from almost £30,000 to just £21,500 – a decline of 28 per cent (£8,450).
Similarly, other popular models like the Tesla Model 3 and Model S also saw large reductions of 27 per cent and 22 per cent respectively.
Christopher Lounds, founder of SellYourCarInAFlash.com, said: “Our latest research shows yet another blow for car owners, on top of many other cost of living issues that are hitting finances.
“Simply put, the market has rapidly realigned after the impact of Covid price increases across the automotive sector.”
He acknowledged that the coronavirus pandemic had a huge impact on vehicle manufacturing with factories shutting down around the world for months at a time.
In addition to global supply chain issues, very few Britons needed to buy a new car given the shift to working from home and the stay-at-home orders during lockdowns.
Data from the Society of Motor Manufacturers and Traders (SMMT) found that new registrations of vehicles in 2020 plummeted to just 1.63 million – the lowest since 1992.
Mike Hawes, chief executive of the SMMT described this period as “the lost year” adding that the drop in sales was the equivalent of £20.4billion in lost turnover.
At its lowest rate, there were just 4,321 registrations of new vehicles in 2020, a 97 per cent decrease compared to 2019.
Christopher Lounds added: “There was always going to be a price drop for used and new cars, and that is clear to see with price falls over the past few months.
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Range Rovers have quickly lost value over the last seven months
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“It’s a challenging market currently, for both car dealers and people who are unable to sell their cars.”
Between May 2023 and January 2024, the Hyundai Ioniq electric vehicle saw the smallest drop in buy-now price with just one per cent.
The petrol-powered Honda Jazz also retained its value across the seven-month period at £11,000, compared to the Range Rover which saw its value drop 31 per cent.