The price of used cars in the UK has rocketed by almost 30%, making them the most expensive in Europe. New figures show prices rose by 28% within the first 11 months of 2021.
What has caused the increase in used car prices in the UK?
Disparities in supply and demand caused by a global semiconductor crisis have been blamed for the rise. More and more buyers have been turning to used cars due to a shortage of new cars sparked by the worldwide lack of semiconductors. This global shortage has had a big impact on the automobile industry, which, in turn, has affected prices of second-hand cars because supply has not been able to keep up with demand.
While used car sales rose by 13.7 per cent in November 2021, stock levels increased by just 3.1 per cent. This increased demand has sparked the rise in used car prices, with stock levels showing no sign of improving any time soon. This has sparked concerns prices will remain high – or could get even higher.
When are used car prices in the UK likely to fall again?
Figures were unveiled by market analyst Indicata and analysts there believe higher prices look set to continue into 2022. Jon Mitchell, Indicata’s group sales director, said: “Both the wholesale and retail markets have got to get used to prices at this level being the new normal.”
This view has been echoed by experts at Auto Trader, who said used car prices show ‘no sign of significant easing’. Auto Trader revealed that October 2021 marked the 19th consecutive month of growth in prices, with the average price of a second hand car increasing by around £3,000 from £13,973 in May to £16,878 in October.
The rise in prices could lead to fleet companies looking for other ways to save money, such as trying to keep fuel expenditure low by using fuel cards offered by specialists such as Fuel Card Services.
The survey by Indicata also revealed good news for battery-powered electric cars, which were the fastest-selling used cars in November. Hybrid vehicle sales have also been strong over the past year, with demand finally coming into line with supply.
The Ford Fiesta is the best selling used car in the UK, while the Porsche Taycan and the MG5 are the fastest-selling electric cars.