Following supply shortages, the UK used car market has changed dramatically in the course of just a few months. Paired with high demands, prices are soaring to record levels and it has consumers asking the question of whether second-hand is worth it.
But how far exactly have prices gone up? And are things going to return to normal soon? Here is everything you need to know about what is going on with the UK used car market.
Record breaking prices
Research shows that used car sales during the first few months of 2023 grew by more than 4% but there is little evidence of prices easing up just yet.
Inflated price tags of nearly £4000 higher than two years ago are largely attributed to high demand and short supply, along with current challenges being faced by the new car market. The microchip shortage means that new cars aren’t being built and the industry is still feeling the effects of the COVID-19 pandemic.
After the majority of the COVID-19 restrictions were lifted, retail opened again and let in a massive demand for cars. However, car production was badly hit as manufacturers struggled to get their hands on vital components. As a result, certain models of cars stopped being made and those of us looking for new cars had to turn to the used car market.
This creates a knock-on effect across the whole market by swelling demand and driving up prices. Finding a used car bargain is unlikely in the current climate but not impossible.
Will used car prices go back to normal?
Despite the current state of the sector, there are signs that prices should be dropping soon. The most recent market report from SMMT is encouraging as it anticipates around 1.8 million new car registrations in 2023. The supply chain crisis also appears to be easing as more inventory is brought in to meet demands.
While it is expected that used car prices could fall as much as 20%, consumers are warned that they may have to wait a while to reap these benefits. Some time will need to pass before demand stabilises.
How can you find the best-used car deal?
If you’re in the market for a used car and can’t wait for the prices to go down, there are some things to consider with the sector being what it is right now. For the best deal, consider car deprecation and the 2030 ban on new combustion engines.
Alongside car maintenance, you should consider getting an inspection check and taking it for a thorough test drive to ensure you’re getting the best value for your money.
