USED CAR PRICES have increased by 67% more than they were before the start of the pandemic with a new study showing inflation rates of 21% year-on-year.

The new report, carried out by the DoneDeal Car Price Index, said the quarterly inflation rate for used cars was 7.4% in the first three months of this year.

In the second quarter, this dropped to 3.1% as consumer demand dipped due to the cost-of-living crisis.

“The quarterly price inflation for Q3 stands at 3.5%, a slight increase on Q2. For context, a ‘normal’ rate of inflation – the average rate in the years 2018 and 2019, for example – would be 0.8%,” the report reads.

DoneDeal’s Motor Report, authored by economist Dr Tom Gillespie, finds that car price inflation continues to defy expectations.

He wrote: “As we approach the end of 2022, the used car market in Ireland continues to be affected by an imbalance in the supply and demand for cars. Between the onset of the pandemic and March of this year, the quarterly rate of inflation averaged at 5.6%, and now stands at 67% comparing March 2020 to September 2022.”

Between June and December 2021 growth in demand was significant, increasing by an average of 3% per month, according to the report. This peaked over the winter and started to fall from March to July of this year.

However, just when it seemed that prices showed signs of peaking at the end of Q2, demand for used cars jumped by 5.8% between July and September.

Dr Gillespie said a demand spike leading up to September is typically associated with the return to school or college period and the increased need for modes of transport that comes with it.

He added: “This time the sharp increase in demand in the past 2 months has been coupled with a slight recovery of stock: total imports and new registrations for August and September are up 36% and 42%, respectively, compared to the same months in 2021 (SIMI).

“This increase in stock levels is also apparent in the DoneDeal data: The number of active car listings on DoneDeal was up 7.4% when comparing September 1st to July 1st of this year.”

Note: Journal Media Ltd has shareholders in common with Done Deal Ltd.

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