Sales of used electric vehicles have more than doubled compared to the previous year as the used car market benefits from the shortage of new vehicles
Sales of used vehicles rose 5.2% in the first three months of the year compared to the same period last year, but sales of electric cars more than doubled — a 120% increase.
Figures from the Society of Motor Manufacturers and Traders (SMMT) show that 1.77 million used car sales took place between January and March 2022 – 86,500 more than in the first quarter of 2021.
The latest figures from Auto Trader’s monthly used car price index show that used car prices in April 2022 were 32% higher than a year earlier, although the months of rapid price growth have now stalled.
The figures for the first quarter reflect the unusual sales development of the past year. January and February numbers were higher (17% and 7% respectively) as dealers were forced to close showrooms in early 2021, but March numbers were down 7% as March 2021 saw an increase in transactions was as dealerships fully reopened.
James Fairclough, CEO of AA Cars commented: “The loss in the new car market was the gain in the used car market.
“The two factors that together have depressed new car sales are also boosting the used car market.
“The first is the lack of offers of new cars for sale. The number of new cars rolling off UK production lines in the first quarter of the year has fallen by a third compared to the first quarter of 2021, and many overseas plants are also producing far fewer cars than usual.
“In contrast, used cars have a clear advantage – availability.
“But there are signs that the falling cost of living is helping to tip things in favor of used cars as well. Inflationary pressures and increasingly gloomy economic news are causing many buyers to think carefully about big purchases like cars.”
He added that the potential savings between new and used cars also sparked interest in used EVs as buyers considered the environmental and running cost benefits amid rising fuel costs.
Jim Holder, editorial director at What Car?, said the used car market would continue to benefit from supply issues in the new car chain, but cautioned that this limited supply would eventually hit the used car business as well.
He commented, “With no end in sight to the semiconductor shortage in the new car market, the used car market is expected to have another strong quarter this year, although the latest figures from SMMT suggest the market is beginning to stabilise.
“According to our latest research, used buyers are still the most active in the market. However, the used car inventory is inextricably linked to the new car market and the delivery delays in new car sales, especially electric vehicles, will mean that things like the used electric vehicle market will not grow at the required rate, which will be a problem for the industry in the years to come.”
Auto Trader’s Ian Plummer also warned that the used car market, particularly for newer models, would soon feel the pressure on the new car chain.
He said: “If fewer new cars roll off the assembly line, then it stands to reason that fewer used cars will be sold as well. Today’s figures underscore this with a not inconsiderable drop in used car sales compared to pre-Covid levels. The ongoing crisis in the supply chain means fleet operators and leasing companies are holding on to vehicles for much longer, further limiting the number of used vehicles coming onto the market.”
He said while newer used cars – up to three years old – are the most susceptible, sales of older models are stronger, reflecting a more plentiful supply of vehicles.
Mike Hawes, Chief Executive of SMMT said: “With the new car market hampered by ongoing global supply shortages, the growth in the used car market is welcome, albeit unsurprising, particularly given that we were in lockdown last year.
“Electric car sales are reviving the market, with zero-emission vehicles penetrating in greater numbers to consumers looking forward to driving the latest and greenest vehicles.
“While there is still some way to go before we see the recent growth in new electric vehicles being reflected in the used market, a buoyant new vehicle market will be crucial to drive fleet renewal, which is essential to delivering carbon savings. “