Strong Q1 for used car sales driven by falling prices

The UK’s used car market delivered its strongest start to a year since pre-pandemic 2019, in the first quarter of 2024.

Used car transactions rose by 6.5% with 1,967,923 units finding new owners, according to the latest figures published by the Society of Motor Manufacturers and Traders (SMMT).

The increase comes against a backdrop of falling prices, with Auto Trader data showing that values are down by 9.3% year-on-year. 

Increasing numbers of electric vehicles (EVs) are now entering the used sector, with Q1 sales up by more than two thirds (71%) to 41,505 – posting a new record market share of 2.1%. This makes EVs the fastest growing powertrain.

Ian Plummer, commercial director at Auto Trader, said: “Q1 marked another significant growth spurt for the maturing used electric market; strong demand saw used EVs sell 15 days faster in March than last year, and currently account for nearly 10% of all sub-five-year-old used car enquiries sent to retailers on Auto Trader.

“Electric prices are beginning to level off, but with a third of used models costing under £20,000 - more than half the average sticker price of a brand-new EV - the second-hand market remains the most compelling and accessible route for buyers eager to make the switch.

“Many used models are now at price parity with their petrol and diesel counterparts; with such significant growth in sales, it’s clear that when priced affordably, EVs are a very attractive prospect.”

Conventional powertrains remained dominant in the quarter, with sales of petrol cars rising 7.7%, while those of diesels fell by 1.3%. Combined, these cars accounted for 92.9% of all transactions.

Plummer added: “The overall retail market was quick to shake off the traditional festive dip, and since the New Year, we’ve been tracking very robust levels of consumer demand.

“Not only did the quarter culminate in a record 89 million visits to our marketplace in March, but used cars sold at the fastest pace we’ve ever recorded, translating to an exceptionally positive start to the year.

“Based on what we’re seeing, the market’s carried some real momentum into Q2, with average sales up over 6% in April.  

“The months ahead may hold some challenges, not least the ongoing squeeze in supply, as well as a turbulent economic and political backdrop, but I’ve every confidence the used car market will continue to demonstrate its huge resilience.”

Superminis remained the most popular vehicle type, with 640,711 changing hands – a 7.2% increase.

In second place, the lower medium segment grew by 9.2% and saw the biggest volume gain at 45,301 units. Rounding off the top three, which remains unchanged on the same period in 2023, dual purpose represented 16% of the market and recorded the best percentage growth with a 10.3% rise.

Together, these segments accounted for three quarters of all cars sold in the period. At the other end of the scale, executive, luxury saloon and upper medium were the only segments to record declines, down 3.5%, 2% and 0.5% respectively.

Mike Hawes, SMMT chief executive, said: “A reinvigorated new car market is delivering more choice and affordability for used car buyers and, increasingly, they are choosing to go electric.

“To enable even more drivers to enjoy the benefits of zero emission motoring, ensuring both supply and demand remains robust is essential. Incentivising new EV uptake and investing in a chargepoint network that is accessible, available and affordable to all will drive the nation’s net zero transition.”

Philip Nothard, insight director at Cox Automotive, says that the “positive momentum” signals the used sector's continued recovery, is a testament to the industry's resilience and is particularly noteworthy in the context of the new car market's ongoing challenges. It also gives us reasons to be optimistic regarding used EV adoption.

“As the economy continues to improve, these trends are expected to gain further traction. The anticipated return to a 'push' new car market is poised to further bolster the flow of used cars through the system, adding to the overall optimism within the used sector.”