Used car sales hit five-year high as new engine supply enters market and prices fall

The used vehicle market rose 6.5 percent in the first quarter of the year, with sales of more than 1.9 million vehicles, new figures show.

This is the strongest start to the year for second-hand engine sales since 2019, before the pandemic, the Society of Motor Manufacturers and Traders (SMMT) confirmed.

The used car market has seen 16 months of consecutive growth, thanks to the supply of new models returning to full delivery capacity, meaning more are starting to trickle down to second-hand dealers and prices are softening from the record levels seen in the post-crisis years. pandemic.

Transactions of used electric vehicles are also increasing.

SMMT statistics show that between January 1 and April 30 some 41,505 electric vehicles changed hands, representing a 71 percent increase over the same period in 2023.

Sales of used hybrids (HEV) and plug-in hybrids (PHEV) also increased by 49.3 percent and 42.5 percent respectively.

However, conventional internal combustion engines (ICE) continue to dominate, with sales of petrol cars rising 7.7 per cent to 1,130,396 units in the four-month period.

That means gasoline alone accounts for more than half (57.4 percent) of all used car transactions.

Second-hand diesel sales fell 1.3 percent in the four months to 697,718 vehicles.

This is still more than a third (35.5 percent) of all used car sales, showing that many drivers are still opting for diesel ones despite manufacturers selecting diesel engines for new models in their Exhibition halls.

This means that ICE cars account for more than nine in ten (92.9 percent) of all transactions (1,828,114 units), while electric vehicles account for one in 50 (2.1 percent) cars. second hand sold in Great Britain.

The Ford Fiesta, a model discontinued by the giant American automaker last summer, remains the most purchased used engine in the country, with just over 80,000 changing hands in the first quarter of 2024.

Mike Hawes, chief executive of SMMT, said: “A revitalized new car market is bringing more choice and affordability to used car buyers and, increasingly, they are opting for electric vehicles.”

“To enable more drivers to enjoy the benefits of zero-emission driving, it is essential to ensure that both supply and demand remain strong.

“Encouraging the adoption of new electric vehicles and investing in a network of charging points that is accessible, available and affordable for all will drive the country’s net zero transition.”

Second-hand car market commentators say used vehicle prices have started to fall from the record levels seen after the pandemic, due to limited production of new models.

Used car prices are falling

With the increase in the supply of second-hand cars entering the markets, competition increases and, therefore, prices fall.

This is fantastic news for motorists, who have endured months of record used vehicle costs during the post-pandemic period.

Auto Trader, the UK’s largest second-hand car marketplace, says average used engine prices in April rose marginally by 1.1 percent over the month, but still 9.3 percent less than in April 2023.

Richard Walker, the company’s director of data and insights, said: “Although prices remain low year on year, April’s data shows the very strong underlying health of the used car market.”

Ford’s Fiesta is the most bought second-hand car in Britain in the first months of 2024. The American giant suspended production of the model, which is the most common engine on our roads today, last summer in preparation for a replacement by electric vehicle.

Richard Peberdy, head of automotive at KPMG in the UK, says used vehicle stock volumes have been boosted by fleets selling vehicles on the market, having updated their inventory.

‘Consumers are seeing a wider range of vehicle options than in recent years, although still below pre-pandemic volumes.

“After years of being inflated due to supply disruption, many models are seeing prices fall as more stock enters the secondhand market and the supply and demand curve tightens.”

And although sales demand for new electric vehicles is slowing (according to the latest SMMT registration data released this week), a used electric car could offer very good value to drivers right now.

Peberdy added: ‘Some of the biggest price corrections are being seen in the used electricity market, where price normalization is occurring as the market evolves from its infancy.

“Although these price fluctuations cause nervousness among some potential electric vehicle buyers, the lower prices of electric vehicles on the used market, which in some cases reach parity with gasoline equivalents, are tempting a more consumers to transition to a used electric vehicle instead of a new one.

“While the overall used vehicle market is doing relatively well, caution or an inability to spend savings, plus the higher cost of financing and insurance, are still deterring some people from buying a car right now.” .

Matas Buzelis, of vehicle history checking service carVertical, adds: “The prices of many used cars have been progressively falling, which is not a bad thing for consumers, especially when other household expenses have increased so much. “significant”.

James Hosking, managing director of used vehicle marketplace AA Cars, said he had seen stock levels “substantially improve” in recent months, which in turn has “helped prices to stabilize”.

He told us: ‘At a time when family budgets remain tight, drivers who opt for a used car will find they can get very good value for money.

‘The latest AA Cars used vehicle index showed that average prices for the UK’s most sought-after used cars fell 9 per cent during the first three months of 2024 compared to the same period last year.

“While these price drops represent a relatively soft reset compared to the large increases seen immediately after the pandemic, prices for electric vehicles and hybrids are falling significantly.”