January demand remained very strong for used cars but continued to be hampered by stock shortages. The market has experienced a 14% fall in stock in February 2022 compared with February 2021 and according to INDICATA’s latest used car insights report, the market has started to settle down after the Christmas break with the first price drop since March 2021
The really appealing aspect of the arrival of new and exciting digital used car retailers is that they are catalysts for change. Rapidly becoming household names, their vast marketing spend is helping to educate and facilitate a transformation in consumer thinking when purchasing a car online.
When ex-fleet cars hit the used market in volume again, their average age is likely to increase above the current 42 months which the industry has to come to terms with. Gone are the days of the 36-month-old fleet replacement cycle
December used car values averaged £9,413, with activity continuing into the festive week as BCA staged sales every day from 27th December through to New Year’s Eve. Year-on-year, average monthly values were up by £1,103, equivalent to a 13.2% increase and underlined both the continued improvement in vehicle mix, along with the dramatic positive shift that used vehicle values have seen this year.
The only restriction on sales will be lack of used stock. As dealers have been shut for over three months the level of part exchanges coming into the market will take a while to improve. Some manufacturers are reporting long lead times on new cars which may not start to ease until the autumn which will cause fleets to extend their replacement cycles, which will further restrict used stock entering the market.
