Used car sales fall by 400,000 as traders feel supply squeeze

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EVs continued to buck the trend, with used EV sales up 57%, but the rest of the market struggled, falling 18.8% from the year-ago period.

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The latest figures from the Society of Motor Manufacturers and Traders (SMMT) show sales in April, May and June fell by almost half a million from 2021 to 1,759,684 in 2022.

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Problems on the new car market have depressed the supply to the used car trade

The market saw a strong upturn in business in 2021 when dealerships fully reopened, but pressure on supply and driver spending appears to have stalled that surge. Sales are down more than 8% compared to the same period last year and down 13.5% from the year before the pandemic.

SMMT chief executive Mike Hawes said the decline was inevitable after strong performance in 2021 and amid troubles in the new car market.

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He said: “It was inevitable that the pressure on new car supply would spill over into the used car market. Nonetheless, Britain’s used car buyers clearly have a growing appetite for the latest low- and zero-emission cars, and we need a thriving new car market to feed it. The next Prime Minister must create the conditions to boost consumer confidence, particularly in electric vehicles, to drive the fleet renewal needed to meet our decarbonization goals.

Like sales of new cars, sales of used EVs continued to grow, but still account for just 1% of the used car market.

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James Fairclough, CEO of used car market AA Cars, said the latest figures suggest demand is cooling but could be picking up again as motorists look to save money.

He commented: “It’s worth remembering that the disappointing headline had a lot to offer – it’s a comparison to strong sales in the second quarter of 2021 when dealerships reopened after months of lockdown.”

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He said new car supply issues helped push motorists into the used car market, but that surge “fizzled,” adding: “Although new car supply issues are finally easing, another factor may be boosting the used car market.” in the coming months – Britain’s rapidly slowing economy.

“While the darkening economic climate has weakened consumer confidence and eroded some people’s willingness to purchase expensive items like cars, there will always be a significant number of drivers who want or need to replace an aging car.

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“For them, the used car market, which offers both a wide range and better value for money than brand new cars, is an extremely attractive option, and even more so as more and more electric vehicles appear on the used market.”

Lisa Watson, sales director at Close Brothers Motor Finance, said financial concerns were also causing the market to slow down. She said: “Well-documented supply chain issues such as semiconductor shortages have continued to push people towards the used car market. However, holding onto their cars for longer has caused transactions to slow down in recent months.

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“Despite supply pressure, demand for used cars remains strong – consumers are turning to the used car market to cushion the blow of the cost of living crisis and avoid delivery times for new cars, which in some cases exceed 12 months.”

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