Do New Car Registrations Cause A Drop In Used Car Prices?
Spring has sprung, and with it comes new car registrations! March marks the beginning of a new registration period for new cars, and this has a significant impact on the used car market. So, whether you're looking to buy new or used, it's important to understand how new car registrations affect the car market and how it can affect your wallet 💸 In this blog, we'll cover everything you need to know about new car registrations this March and how it affects used car prices, so you can see if you could save some money!
What are new car registrations? 🤨
First, let's start with the basics, every year, the UK government releases new registration plates for cars, and this year it's "23". This new registration period starts on March 1st and ends on August 31st. During this period, car manufacturers will release their latest models to the market, complete with the shiny new registration plates. 🚘
The release of new registration plates is always an exciting time, whether you're a car enthusiast or if you're simply waiting for used cars to drop in price, it marks the beginning of a new year in the car industry. So if you're looking to get an upgrade on your car, this might just be the best time to do so
How does it affect the used car market?
The release of new car registrations has a ripple effect in the used car market. When people start buying new cars, they often trade in their current car to help pay for the new one. This creates a surplus of used cars, which most often drives down the prices of used cars 🚘
If you've been on the fence about buying a new car this might just push you over the line! It means that you're more likely to find a good deal on a pre-owned vehicle. With more supply comes more options, and you can take advantage of this by negotiating a better price for the used car you want, since you'll have many options to choose from.
So maybe you're starting to question if its worth it, and you may even think about why you'd get a used car over a new car 🤨 Well let's discuss it.
What are the benefits of buying a used car?
Buying a used car can be a smart financial move, especially during a time when prices are likely to drop, such as now. There are several benefits to buying a used car:
Lower price: Used cars are generally cheaper than new cars, and with prices likely to drop after the release of new car registrations, you can save even more money 💸
Depreciation: New cars can lose up to 20% of their value in the first year of ownership, while used cars have already gone through this process. This means that a used car will have a slower rate of depreciation than a new car 🚘
Lower insurance premiums: Used cars are often cheaper to insure than new cars, which can save you money on your monthly premiums 🚘
More choice: With a surplus of used cars on the market, you're more likely to find the exact make, model, and year of car that you're looking for 🚘
But, we've made this process even easier for you, you have the option to use car finance to buy the car of your dreams, and why not buy your new car with Carmoola? 😉 If you need a bit more confidence to buy during the peak of new car registration, find out a bit more about Carmoola 👇
About Carmoola 🕺
No more wasted time hunting down the perfect car, only to find you can’t afford it, Carmoola gives users an immediate pre-approved budget and virtual card for instant purchasing. The freedom to go shopping, knowing what you can spend, without sending off reams of forms and payslips, puts the consumer in control of their car purchase.
Founder Aidan Rushby (CEO) has extensive experience in fast-moving, scale-up businesses, having founded Movebubble.
Co-founded by Amy McKechnie (Director of Product and Marketing), Rushby is also joined by Ukrainian co-founders, Roman Sumnikov, Chief Technology Officer and Igor Gordiichuk, Chief Information Officer.
Carmoola is the new way to pay for a car in just three easy steps 😯
Carmoola offers additional consumer benefits; better value finance that cuts out the middleman, and flexible in-app financing, so you can increase your payments and make overpayment. Or you can even completely pay off your loan without incurring any penalties or charges, save the industry standard one month's interest for the period of notice.
Carmoola is the only company to be in the process of offering green incentives such as lower APRs on electric vehicles to encourage the uptake of clean-air cars, carbon footprint calculators, and to pass on savings from ESG debt funding to consumers - this will be launched soon 🌳
Therefore, to summarise, there is a link in the new car registrations coming out and a drop in used car prices. This is because, as mentioned, one of the main ways is through increased supply. As more people purchase new cars, there are more used cars on the market, which can lead to lower prices due to increased competition. This is particularly true in the short term, as new cars depreciate rapidly in the first few years of ownership.
However, there are other factors that can also impact used car prices. For example, changes in the economy, gas prices, and consumer preferences can all play a role in determining the value of a used car. In addition, the specific make and model of the car, as well as its condition and mileage, can also affect its price ⤵️
You can calculate your budget at no cost to you through our app. 🌟🌟 and what better way to look into it when you could be saving some money!