It’s a question on the minds of car buyers and sellers alike in recent times. “Are car values sinking?” Fluctuating market conditions, economic uncertainty, and evolving consumer preferences has seen the used car industry experience a notable shift.

What influences used car values?

When it comes to answering whether car values are sinking, it’s important to understand the factors at play that largely contribute to their fluctuation.

A major influence is simply market demand. Where there is high demand for specific makes and models, prices tend to rise in the same way that prices fall when demand also does.

Other factors include:

  • Vehicle condition
  • Age
  • Mileage
  • Brand reputation

A well-maintained car with low mileage and a desirable brand is more likely to hold its value better than one in worse condition or higher mileage. Brand reputation is important because some brands more than others have a reputation for reliability and durability, something that most drivers prioritise and that impacts a car’s resale value.

Economic factors also play a large role when determining a used car’s value. Inflation affects the cost of living which, in turn, affects the price of cars. Interest rates also affect the used car market. Low interest rates means more affordable financing and increased demand for vehicles new and used, whereas higher interest rates deter buyers and lower demand.


The role of supply and demand

Like any sellable goods on the market, the dynamics of supply and demand play a notable role in the price of used cars, with the overall availability of used cars impacting their prices quite directly. If there is a decrease in new car sales or a shortage of trade-ins, prices can rise. But when there is more abundant supply during periods of high sales or increased lease returns, prices may decline due to higher availability.

If you want better insight into the used car market, it may be worth taking a deeper look into recent market trends before making a decision to buy or sell. If you’re seeing slow sales, there might be limited supply and you may get a higher price for your car. But if there has been a recent surge in car sales in your area, the overall value of cars may decrease.

Technological advancements and shifting consumer preferences

Progress in automotive technology can have a surprisingly profound impact on used car sales. A great example is the introduction and proliferation of EVs, which totally disrupted the traditional used car market.

As more drivers consider the environmental benefits and long-term cost savings of EVs, the demand for used electric cars has surged. This increased demand for used EVs, combined with the relatively limited supply, has contributed to much higher resale values.

Elsewhere, there is growing interest in autonomous features and advanced safety tech, making cars equipped with these additions much more sought after by safety-conscious drivers, allowing them to retain their value better over time.

The impact of new car sales

You may be interested to know that new car sales have an important impact on answering the question as to whether car values are sinking, and it would help you to understand this relationship when evaluating the value of used cars.

Availability of trade-ins

Many people who buy new cars tend to trade in their existing cars to reduce the overall cost. This can be great for consumers who want to save on their new motor, but it also has a direct effect on the market availability, where greater volumes of traded-in cars leads to greater supply of used cars, and therefore lowering the value when it comes to resale.


Leasing has become an ever popular purchase option for customers in recent years, with many more drivers choosing to lease their car than buy it outright. At the end of lease terms, these cars then enter the used car market as pre-owned units, contributing further to supply and availability in the market, and therefore their resale value.

Manufacturer incentives

Cash rebates, low-interest financing, and extended warranties on new vehicles can sway consumers towards buying new cars instead of used ones. This impacts demand for used cars, potentially lowers prices and entices buyers with the advantages of buying new.

Rear of a red Volkswagen Taigo

So, are car values sinking?

Well the answer is never as clear cut as yes or no. It’s much more dynamic than that and is constantly affected by an ever shifting market. Several factors have an impact on the market, including:

  • New car sales
  • Trade-ins
  • Manufacturer incentives
  • Leasing options
  • Technological advancements
  • Changing consumer preferences

Therefore, it’s important for you to stay informed of these factors if you want to get the best deal.

Or you could just sell your car with Sell 2 Swansway. Part of the esteemed Swansway Motor Group, we have made selling your car easier and more convenient than ever before. Not to mention that our quotes are fair and representative of current market trends, so you’ll never get less than you deserve for your car.

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