Rising cost of living continues to impact used car prices and EV demand

Used car prices fell marginally by -0.3% in October but overall prices are still 24.8% higher than at the start of 2021 according to INDICATA UK’s latest Market Watch insights report.

In the first 10 months of 2022 prices have fallen by -4.0% with the UK remaining the only country in Europe to experience a fall.

The rising cost of living is starting to have an impact on the used car market with sales down 8.3% to the end of October. But as sales have fallen, stock levels have increased by 5.9% compared with 12 months ago which is welcome news in a market devoid of used cars for over two years.

“It’s ironic that a fall in both sales and prices has been relatively healthy for dealers,” commented Jon Mitchell, INDICATA UK’s group sales director.

“The used market remains very healthy but the continuous rise in the cost of living has taken the sting out of consumer demand. This trend seems to have set the tone for the industry into early 2023.

“But while new car supply remains restricted used car prices will remain stable because of the major stock shortages the industry continues to experience,” he added.

The rising cost of living is also impacting the speed at which used EVs are selling due to them being significantly more expensive than a used petrol or diesel. Used petrol vehicles are now selling twice as quickly as EVs but during August it was the other way round.

Ongoing driver education from the industry continues to encourage drivers to buy a zero-emission used car for the very first time. INDICATA’s data confirms sales of EVs continue to increase albeit from a small base, even if they are taking longer to sell.

“Used EV sales haven’t ground to a halt but are taking twice as long to sell. Many of our dealer customers are stocking both used hybrids and EVs in preparation for when the market moves towards low or zero emission motoring,” said Mitchell.