Used car market up 5.1 per cent in Q1 2022 but signs of change

Published 10 May 2022
  • Used car market grew 5.1 per cent in Q1 2022 compared to lockdown-hit Q1 2021.
  • Transactions for electric cars have more than doubled from 6,625 to 14,586 sales. 
  • Market experts say used car prices may have peaked.

The used car market grew by 5.1 per cent in the first quarter of 2022 compared to Q1 2021, with 1,774,351 cars changing hands in the UK, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT). 

The growth in the first quarter should be treated with caution, however, given that it is compared with the first quarter of 2021 when showrooms nationwide were closed due to pandemic-related lockdowns with only online car sales allowed.

The SMMT said that used car sales in the first quarter of 2022 have been driven by a buoyant market in January and February, with rises of 17.7 per cent and 7.4 per cent, respectively. 

March, on the other hand, saw a decline of 6.8 per cent, following a stronger performing month in 2021 as the pandemic-affected market began to recover, according to the SMMT. 

Car Sale

Despite growth over the course of Q1 2022, used car transactions remain 12.2 per cent below the pre-pandemic level of 2019.

Used car values may finally have peaked

Data from a number of sources shows that used car prices have started to drop.

Cap HPI reported a 2.1 per cent fall in used car values in March and predicted they would drop by at least that amount again in April.

Online used car marketplace heycar has also seen signs of change, with its head of sales Chris Evans saying: “It's been a turbulent time for the used car market but heycar data suggests that values may have finally peaked with average prices in early-Q2 being 2.7 per cent lower than they were in Q1.” 

Man In A Car Showroom 

Cox Automotive recently revised its used car forecasts, suggesting that “the used car bubble could be deflating”. 

Factors including the ongoing cost-of-living crisis and rising inflation, the lowest reading since June 2008 from the UK’s consumer confidence index, the recent decline in used vehicle trade values, and the easing of wholesale demand all “indicate that the used sector performance could be on the turn”, it said. 

It expects Q2 2022  to end on 1.91 million transactions, a 11.9 per cent decrease year-on-year, while Q3 2022 is now predicted to end on 1.95 million transactions, 4.2 per cent down year-on-year.

The full year is predicted to end on 7.4 million used car transactions, a 1.6 per cent decrease year-on-year, and a 1.3 per cent downgrade on Cox Automotive’s previous forecast. 

Record first quarter for used electric cars

Electric Car Charging (1)

It was a record first quarter for used battery electric vehicles (BEVs), with buyers keen to purchase pre-owned zero-emission cars, according to the SMMT. 

Transactions for BEVs more than doubled from 6,625 to 14,586, a rise of 120 per cent. Plug-in hybrid electric vehicles (PHEVs) and hybrids also changed hands in greater numbers than 2021, rising by about a third (35.3 per cent) to 14,433, and more than a quarter (28.8 per cent) to 35,007 sales, respectively.

Despite the growth, petrol and diesel powertrains continued to dominate the used market representing 96.2 per cent of used sales, or some 1,707,135 cars.

Plug-in vehicles comprised 3.6 per cent of the total market share – up from 1.6 per cent in Q1 2021, but illustrating that the growth in new EVs over the past two years has yet to have a significant impact on the overall market, the SMMT said.

Increased appetite for buying online 

Buying Online

Motorists are showing more willingness to buy online, according to heycar. It has seen has lead volumes on cars available to buy online increase by 50 per cent since January 2022.

More than half (53.6) per cent of the 1,355 people that took part in HonestJohn.co.uk's recent survey said they would buy their next vehicle online if it was sold with a money back guarantee and delivered to their door. 

However, car buyers are also willing to travel to find the right vehicle themselves, with 44.1 per cent saying they would journey 50 miles to collect a used vehicle whilst 34.8 per cent said they would be willing to travel more than 100 miles.

1How many used cars were sold at the start of 2022?

In total, 1,774,351 used cars were sold in the first quarter of 2022, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT). 

That figure is 5.1 per cent up compared with the same period in 2021 (86,596 additional cars), when car showrooms nationwide were closed due to pandemic-related lockdowns with only click and collect transactions allowed.

Despite growth over the course of the first quarter of 2022, used car transactions remain 12.2 per cent below the pre-pandemic year of 2019 when 2,020,144 used cars were sold in Q1. 

2How many used electric cars were sold in Q1 2022?

Used car sales of battery electric vehicles more than doubled from 6,625 to 14,586, in the first quarter of 2022.

Plug-in hybrid electric vehicles and hybrids also changed hands in greater numbers than the year before, rising by 35.3 per cent to 14,433, and 28.8 per cent to 35,007, respectively.

However, petrol and diesel powertrains continued to dominate the used car market, representing 96.2 per cent of used sales, or some 1,707,135 cars. 

Ask HJ

Will the price of second hand cars go down in 2022?

I sold my 2014 Fiesta a few weeks ago. I bought it for £7,950 in 2017 and sold it for £6,018 online. I thought it was a good time to sell as prices were high for second hand cars. I would like to buy another car and think prices of cars may come down due to cost of living but am not sure how long to hold my nerve for. Will second hand car prices fall in 2022?
Yes, we're seeing used car prices starting to drop: https://www.honestjohn.co.uk/news/buying-and-selling/2022-04/car-owners-urged-to-sell-as-record-used-car-prices-start-to-drop/ It's unlikely that the market's going to crash entirely (the new car chip shortage is ongoing) but the Ukraine war and rising fuel prices mean the market isn't as buoyant as it was a month or two ago.
Answered by Andrew Brady
More Questions
Ask HJ

What is the average life of a car?

Do you know what the lifespan of a Nissan Micra engine would be? My 2004 diesel Micra has only done 87,000 miles. How long will it go on for?
The average car in the UK is scrapped at 14-years. This is usually when the cost of the repairs start to outweigh the value of the vehicle. I think your Micra has done a brilliant job carrying on for as long as it has. As long as the engine is serviced annually with an oil and filter change then there is no reason why it can't carry on for many more years. Eventually, corrosion of the bodywork and suspension will become an expensive issue if the car is stored outside and used as a daily runner. But it reads like your Micra is being very well cared for and hopefully it'll be good for another 87,000.
Answered by Dan Powell
More Questions

Comments

Mary Edmondson    on 25 May 2022

Thanks for the info. I am thinking about buying a new car. I want to buy an electric car and that is why I am searching for information online regarding the electric car and people's reviews on an electric car.

Annie048    on 26 May 2022

Its was so nice to read. one small suggestion from my side, when ever you plan to buy a used vehicle, do a complete vehicle checks from any of the history check providers to avoid being into scams

Small vehicle history check providers i suggest are

www.caranalytics.co.uk/
theautoexperts.co.uk/
totalcarcheck.co.uk/

Mary Edmondson    on 26 May 2022

Merci pour l'info. Je pense acheter une nouvelle voiture. Je veux acheter une voiture électrique et c'est pourquoi je recherche des informations en ligne concernant les voitures électriques et les avis des gens sur les voitures électriques. J'ai gagné beaucoup d'argent en jouant à des jeux casino en ligne sans inscription et maintenant je veux dépenser cet argent pour acheter une nouvelle voiture pour moi et ma petite amie.

Add a comment

 

Value my car