UK used car prices are highest in Europe

Used car prices in the UK have risen by 28% in the first 11 months of 2021, which is more than any other European country according to Indicata.

The used vehicle pricing specialist says used car stock levels have fallen by 17% this year as car buyers switch their attention to used cars due to continued new car supply constraints caused by the global semiconductor crisis.

It means demand continually outstrips supply. Used car sales rose by 13.7% in November compared with November 2020, but stock levels only increased by 3.1%, which explains why prices have remained so high.

Jon Mitchell, Indicata’s group sales director, said: “This current market trend of demand exceeding supply looks set to continue into the back end of 2022. Both the wholesale and retail markets have got to get used to prices at this level being the new normal.

“Stock levels show no sign of improving which guarantees prices will remain strong. There are restricted number or part exchanges coming into the market and a vast number of leasing contracts continue to be extended until such time as new car supplies improve.”

For the second consecutive month, Battery Electric Vehicles (BEVs) were the fastest-selling powertrains on average in November with a stock turn of 8.7x. These are positive signs that BEVs are being gradually accepted as an integral part of the used car market, although volumes coming back into the used market remain quite small when compared with petrols and diesels.

Hybrids have also seen a significant year-on-year increase in the speed of sale, which means demand has now grown to match supply for both powertrains according to Indicata.

When looking at the best-selling used cars in the UK the Ford Fiesta leads the way, closely followed by the VW Golf and Mercedes A-Class, while the Porsche Taycan and MG 5 are the fastest-selling electric cars.

Philip Nothard, insight and strategy director at Cox Automotive, believes wholesale vehicle values will show signs of stabilisation throughout mid-2022 as the market attempts to get back to some form of normality. However, the coronavirus pandemic has rapidly accelerated the online and digital marketplace to what existed two years ago. As a result, it's also entirely possible that a new benchmark for used vehicle values has been reached that may never dip to pre-pandemic levels.