Tactical registrations by car manufacturers impacted the used car market in April with sales of sub-12-month-old vehicles rising by 39.1% year-on-year, according to INDICATA UK’s latest Market Watch report.
This surge indicates that car supply is nearing pre-Covid levels but raises concerns about potential long-term damage to used car values if the trend persists.
Currently, many nearly new used cars – especially electric vehicles (EVs) – are being registered but are not being wholesaled, as dealers are hesitant to increase their inventory of used EVs.
Should these used EVs flood the market, it could further depress their values, even as EV prices have stabilised this year.
The UK’s Market Days’ Supply of used EVs is the lowest in Europe at 57 days, compared to petrol at 40 days, diesel at 44 days, and hybrids at 45 days.
Market Days’ Supply measures the available stock of used cars against the current daily sales rate, showing that EVs performed competitively with internal combustion engine (ICE) vehicles in April.
Average UK used car prices declined by 0.71% from April to May, indicating a healthy market despite an influx of older vehicles as companies update their fleets.
“The used market remains healthy as supply and demand are finely balanced. However, if the volume of nearly new used cars continues to increase, it will impact the used values of all cars, not just EVs,” explained Dean Merritt, INDICATA UK’s head of sales.
“Used prices are trending back towards pre-Covid levels, having fallen by 16% since January 2023,” he added.