USED car demand is slowing down but the industry’s stock shortage is so acute the market will stable at its current position for years to come predicts Shoreham Vehicle Auction’s Managing Director Alex Wright.
The increased cost of living and rising inflation have both impacted retail used car demand during 2022 affecting the wholesale market with falling prices and reduced sales.
With 1.72m fewer new cars being sold between January 2020 and May 2022 the market is short of 1.72m used cars, while dealers are also retaining a greater percentage of their part exchanges against their new car sales.
Combined these trends have created a wholesale used car shortage of over 2m since Q1 2020, which puts into perspective how the sector has been badly affected by new car shortages created by the global semiconductor crisis.
“The market is so short of stock that even if demand remains depressed for a prolonged period prices will remain strong. We do not predict a price crash like we’ve seen in previous years as each month the supply shortage is getting worse,” said Wright.
“We believe prices will stay at their new normal for another two to three years while the hole in the used car supply is slowly filled,” said Wright.
Leave A Comment