Used car market grows 11.5 per cent in 2021 as prices show no sign of stop
The UK’s second-hand car market has grown 11.5 per cent, with more than 7.5 million transactions registered in 2021.
According to data from the Society of Motor Manufacturers and Traders (SMMT), 777,997 more cars were sold compared with 2020 levels, even though performance remained 5.5 per cent below the pre-pandemic five-year average.
Transactions reached peak levels in the second quarter, with May as the highpoint with 769,782 deals carried out.
“It’s good to see the used car market return to growth, even if activity is still below where we were pre-pandemic,” said SMMT’s chief executive Mike Hawes.
“With the global shortage of semiconductors set to ease later this year, releasing the squeeze on new car supply, we expect more of the latest, cleanest and zero emission models to become available for second owners.
“The demand for personal mobility has undoubtedly increased during the pandemic, so it’s vital we have healthy new car sales to drive fleet renewal and the used car market if we are to improve air quality and address climate change.”
Despite supply chain issues, soaring levels of demand have spilled into 2022, giving the market a banging start, City PM reported.
According to Auto Trader’s retail price index, the average price of a used car has surged for the 22nd consecutive month, reaching £18,067 – a 31 per cent year-on-year increase on a like-for-like basis.
“The January blues have done little to take the heat out of the used car market, which has started the year in a very strong position,” said Auto Trader’s director of data and insights Richard Walker.
“From what we’re tracking there’s little evidence to suggest that these very unusual market dynamics will change significantly any time soon.”
Used car prices are also to blame for the surge in inflation rates, which in January reached the highest level in almost 30 years.
KPMG’s UK head of automotive Richard Peberdy believes that once supply chain issues wear off price will level, freeing up consumers currently squeezed on a number of fronts.
““As supply chain problems eventually ease, more new cars will be produced, more used cars will enter the market and their prices will begin to level off.”