The fourth quarter of 2021 is likely to set the tone for the used car market in 2022, says Startline Motor Finance, reflecting what the company describes as “the real post-pandemic economy.”

Paul Burgess, chief executive at Startline Motor Finance, said: “For some time, we have all been working in a pretty successful used car market created by highly unusual and sometimes artificial circumstances. However, it is now possible to see definite signs of that situation coming to an end in Q4.”

Burgess added that this doesn’t mean that the market is set to fall. “In fact, we believe 2022 will remain relatively buoyant but we are very likely to see a scene emerging that will much more closely resemble business-as-usual. The two big factors here are the ending of government pandemic-based economic support to a major degree and the slow normalisation of supply chains meaning that new car sales will start to pick up.

“Arguably, we are now entering the real post-pandemic economy. The supply and demand trends that we are seeing are the ones that will probably come to represent the new normal for the used car sector in 2022.”

Burgess said that wider social factors would also play a role in the sector’s outlook for 2022, however they were more difficult to predict.

“We’re likely to see an unusual employment situation persist for a little while where unemployment is quite high but wages are rising, too. It is tricky to understand how and if this will ultimately impact on car buying or how quickly it will resolve,” he said.

“It’s also probable that we’ll begin to get a clearer picture of the longer term impact of the pandemic on how people live and work. For example, we’ll start to find out how much less travel there will ultimately be as a result of home working.

“Finally, there is the chance of Covid reasserting itself before Christmas. Although the government is likely to be highly resistant to further lockdowns, very high levels of infection would likely affect consumer behaviour.”

Burgess added that Q4 would most likely see the used car market plateau after several consecutive quarters of growth.

“What this will not mean, we believe, is anything that looks like a collapse in values. Even though new car supply is likely to increase gradually, there is a backlog of orders to clear. Used car stock will remain in short supply.”