THE USED CAR market has experienced “unprecedented price inflation”, with prices 79% more expensive than pre-pandemic levels.
That’s despite the annual rate of inflation slowing to 10.7% in Quarter 2 of this year, down from an annual rate of 26.6% in Q2 of last year and the lowest annual rate of inflation since Q1 2020.
The findings are contained in DoneDeal’s Motor Price Index for Quarter 2 of this year.
Author of the report Tom Gillespie explained that he was able to “look behind the scenes at these price movements” by using advertisement view metrics as an “indicative measure of demand”.
“After a 14% spike in demand in Q1 2023, typical at the beginning of the year, a 9.7% decrease in demand was observed in Q2 2023,” said Gillespie.
“This was coupled with a 7.7% increase in the stock of used cars on DoneDeal and hence had a stabilising effect on prices,” added Gillespie.
He said this “rebounding of supply and a stabilising of prices is encouraging from an affordability perspective”.
The share of used cars being imported from the UK also fell to a new low of 28.8%.
In Q1 of 2020, the share of all imported used cars coming from the UK was 93.6%.
Overall, used car imports to Ireland are down 52.3% in the first quarter of this year when compared to the first quarter months of 2019.
The DoneDeal report for Q3 of 2023 also found that the market for new cars and electric vehicles (EV) is growing.
Figures from the Society for the Irish Motoring Industry (SIMI) revealed that in the first three months of this year, 19,440 new cars were registered in Ireland, a 27.4% increase when compared to the same period a year ago.
Gillespie said part of this is the “cooling of supply chain issues in the motor production industry which has led to reduced wait times for new models”.
Meanwhile, SIMI data reveals that the share of new EV registrations continues to grow, with 5,009 new EVs registered in Q2 of this year.
That’s a 127% increase when compared to the same period last year.
EVs and hybrid cars now account for 51.3% of new cars registered in Ireland, compared to a figure of 18% in 2020 and 6.2% in 2018.
In the entirety of 2018, 1,233 new EVs were registered in Ireland.
This grew to 4,013 in 2020 and then 15,676 last year.
DoneDeal said this recent increase in EVs is “quickly translating to the used car market2.
“Q1 of 2023 saw a tripling of the number of used EVs listed on DoneDeal in comparison to the previous quarter, roughly 1,500 compared to just over 500 in Q4 of 2022,” said Gillespie.
In Q2 of this year, that figure has increased again to over 1,700 listings.
While Gillespie notes that this is “still only a small percentage of the share of cars listed on DoneDeal at 2.2%, it is a large increase from the same period one year ago when EVs accounted for just 0.7% of used cars listed on DoneDeal”.
Prices for used EVs have also dropped by 4.7% in Q2 of this year.
Gillespie said this is “the largest price drop in any part of the Irish used car market since well before the pandemic”.
“The transitional supply shock of new EVs to the used car market can go some way to explaining this price drop, but also, the grant for new EVs is due to be lowered in July, making a purchase of a new EV more attractive than a second-hand equivalent,” said Gillespie.
“As EVs become more plentiful in the used car market they will become more affordable, encouraging more people to switch to a cleaner method of transport.”
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