DoneDeal's Motor Report, authored by economist Dr Tom Gillespie, has developed a comprehensive used car price index
The price gap between new and used cars is tightening and in some cases a second-hand version of the same model is being listed for more than its new counterpart.
That's according to The DoneDeal Car Price Index, which this week has published a report describing the market situation as 'unprecedented'. Used car price inflation has accelerated to an all-time high of 56%, jumping a further 7.7% since October 2021
The pandemic and Brexit-induced shock to the market has had a staggering effect on prices in Ireland – used car prices are now 56% higher than they were just before the onset of the pandemic in January 2020. In the US the rate of used car inflation for the same period is 47%, in the UK: 33%. In just three months since October 2021 used car prices have increased by 7.7%
The price gap between new and used cars is tightening and in some cases a second-hand version of the same model is being listed for more than its new counterpart, an unprecedented situation.
Is there value in your trade-in? DoneDeal's Motor Report, authored by economist Dr Tom Gillespie, has developed a comprehensive used car price index and finds that there could be.
As of the end of December 2021, used car prices are now 56% higher on average since the onset of Covid-19 in early 2020.
In the final quarter of 2021 prices rose by an average of 7.7%, the second-highest quarterly price rise observed since 2011, second only to Q3 of 2021’s quarterly price increase of 10.6%. So although the increase in prices is not as sharp as the previous quarter, it is still at record levels.
Consumer Demand on DoneDeal for both new and used cars from Ireland's Car Dealerships is also at an all-time high - up 80% on January 2020, the last ‘normal’ January for comparative purposes.
The deficit of used cars is in the region of 125,000 vs normal trading conditions. In previous years the supply of used cars in Ireland was aided by the glut of Celtic Tiger year cars. However, this aging cohort of cars are rapidly becoming obsolete, hitting the lower end of the market hardest, which go towards explaining the 83% rate of price inflation in cars below €3,000 observed since the pandemic. This contrasts with a more modest 30% rate of inflation in the upper end of the market (cars worth €13,000 or more) for the same period.
Consumers looking to trade in their old cars have stronger bargaining chips as car dealers struggle to maintain their inventory.
In Ireland, the deficit of UK used cars has led to a doubling of the number of imported used cars from Japan, from 3,243 in 2019 to 9,805 in 2021.
In Ireland the share of electric and hybrid new car registrations is rapidly increasing. In the first half of 2019, only 2.4% of new car registrations were fully electric, in the second half of 2021 that figure has quadrupled to 10.5%.
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