Used Car Sales: UK Used Car Sales Hit Six-Year Low.
The number of second-hand cars changing hands has slumped to its lowest level since 2015 due to stock running thin and prices soaring, industry figures show.
With a growing number of drivers opting for the used car market as an alternative to waiting months for delayed new cars to be delivered, dealers’ stock of second-hand vehicles has declined as buyers purchase them at record-breaking rates.
Despite used car sales dropping to their lowest level for six years, more used car buyers are choosing electric or plug-in hybrid cars. But the decline in availability of used cars overall, coupled with rising competition for pre-owned models, has caused car values to spiral in recent months, meaning some customers can’t afford the vehicles they want.
The average price paid for a second-hand vehicle has risen from £13,973 in May to £16,878 by the end of October – the highest it has ever been. Some ‘nearly new’ year-old models are in such high demand that 22% are being advertised as more expensive than the price of the same brand-new models in showrooms.
A total of 2,034,342 used vehicles changed hands in the previous quarter, down 6% on last year and 2% on pre-pandemic figures from 2019, official statistics published by the motor trade body show. Purchases were the weakest for a three-month period since 2015, with sales dropping in every month, down 5% in July, 6% in August and 8% in September.
The limited vehicle stock and overpriced advertised prices has been triggered by the short supply of new cars entering the market. Car makers’ ongoing trouble securing semiconductor chips globally for the production of new models means outputs have massively slowed since the pandemic first hit.
As manufacturing is not at full capacity, this has delayed delivery dates for brand new cars, with some customers being told they could wait for more than a year for theirs to arrive, hence the rise in more buyers turning to the used car market.
Meanwhile, demand for electric or plug-in hybrid cars has grown, according to data from the Society of Motor Manufacturers and Traders (SMMT). Figures for the third quarter of 2021 show that 14,182 EVs changed hands – a 56.4% increase on the same period in 2020. This makes it the best quarter yet for used electric car sales. Second-hand plug-in hybrid sales also increased by 43.3% in the period, while the number of used hybrid models sold also increased by 20.3% to 40,157 units.
Despite this rise in demand, used hybrid electric sales are still low compared with petrol and diesel car sales, which made up as much as 94% of transactions, accounting for 1,959,955 sales between July and September. Sales of used petrol models dropped by 6.9%, with diesels down 7.6% for the quarter, compared to the same period in 2020. Across all powertrain types, used car sales dropped by 6.2%.
Mike Hawes, chief executive at the Society of Motor Manufacturers and Traders, said: “Given the circumstances, with the global pandemic causing a shortage of semiconductors needed to produce new vehicles, undermining the new car market, used transactions were always going to suffer too.
“This is particularly worrying as fleet renewal – of both new and used – is essential if we are to address air quality and carbon emissions.”