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November 22, 2022

Increasing cost of living impacts used car prices and EV demand, finds report

The prices of used car dropped marginally by -0.3% in October but overall, the prices of these vehicles continue to be 24.8% higher than at the beginning of last year, according to an insights report of INDICATA UK.

During the first ten months of this year, prices dropped by -4%, with the UK being the only country in Europe to witness a fall.

The increasing cost of living is beginning to have an impact on the used car market with sales going down 8.3% to the end of October.

However, as sales have fallen, stock levels have grown by 5.9% as against 12 months ago, which is good news for a market devoid of used cars for more than two years.

INDICATA UK group sales director Jon Mitchell said: “It’s ironic that a fall in both sales and prices has been relatively healthy for dealers.

“The used market remains very healthy but the continuous rise in the cost of living has taken the sting out of consumer demand. This trend seems to have set the tone for the industry into early 2023.

“But while new car supply remains restricted used car prices will remain stable because of the major stock shortages the industry continues to experience,” he added.

The growing cost of living is also affecting the speed at which used EVs are selling given that these are significantly more expensive than a used petrol or diesel.

Used petrol-run vehicle s are now selling twice as quickly as EVs. However, the trend was the other way round in August.

Ongoing education to drivers from the industry continues to encourage them to purchase a zero-emission used car for the very first time.

The data of INDICATA shows that sales of EVs continue to increase despite from a small base, even if they are taking longer to sell.

“Used EV sales haven’t ground to a halt but are taking twice as long to sell. Many of our dealer customers are stocking both used hybrids and EVs in preparation for when the market moves towards low or zero emission motoring,” added Mitchell.

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