Ask the Expert: How has our Skoda lost 40 per cent of its value in 14 months?
Dear Alex,
My wife bought a 2019 Skoda Fabia for £13,225 in September 2022. She had previously owned VW Golfs and is keen to buy another. Despite her only having added 3,000 miles, the VW and Skoda dealers offered £8,000 in part-exchange for the Fabia – 40 per cent depreciation in 14 months – while two independent garages offered £8,500. Is this normal depreciation on a used Skoda, or did I overpay in the first place?
– GL
Dear GL,
The dearth of superconductor supply in 2021 induced by the Covid-19 pandemic caused new car production to slow to a crawl, with the effect that used values rocketed.
Buyers who couldn’t get hold of new cars instead resorted to buying used; those that could hold onto their cars did, and the combination of the two resulted in high demand for but low supply of used cars.
This effect was still at play late into 2022, when your wife bought her Fabia, and only as 2023 came around did values start to fall back.
However, when they did, the cost of living crisis and the darker economic mood meant the swing was pronounced; from April until November, used car prices fell by 17.6 per cent on average, according to the price trackers at Cap HPI.
That fact alone will have wiped more than £2,000 off the value of your wife’s car, meaning it would retail today at around £11,000.
But, of course, no dealer is going to pay you the retail price on a part-exchange. And this is another factor in the disparity – you’re comparing forecourt retail prices with part-exchange valuations.
Naturally, you can expect the latter to be significantly lower than the former, to allow for the dealer’s overheads and some profit margin. And you’ll also have to factor in the increased age of the car; yes, it’s only done a few thousand more miles, but its value will naturally have decreased even if it hadn’t turned a wheel in that time, as it’s a year older.
In short, your wife’s car hasn’t depreciated by 40 per cent and neither did you necessarily overpay for it. But by changing cars so soon after buying, with values having taken a tumble in the meantime, you’re feeling the effect of that slide combined with the usual part-exchange hit in a particularly stark way.
Don’t forget, though – there’s almost always room to haggle on the part-exchange value of a car; the dealer’s first offer should never be considered its final one.
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