The price of used cars in the Republic has risen more than 79 per cent since the pandemic ushered an era of “unprecedented” vehicle price inflation, a new report from online marketplace DoneDeal has indicated.
The rate of second-hand car inflation slowed to 0.9 per cent in the three months to the June, according to the website’s new Motor Price Index report, the slowest pace since the first quarter of 2020.
But a used car was still an average of 10.7 per cent more expensive at the end of June compared with the same month last year at €13,000 and 79.1 per cent ahead of pre-pandemic levels.
Economist Tom Gillespie, who wrote the DoneDeal report, said the decline in the quarterly rate of inflation to more normal levels of 0.9 per cent – from a high of 8 per cent in the third quarter of 2021 – was aided by the cooling of supply chain issues that have dogged the auto industry since the initial outbreak of Covid-19.
This has helped to reduce wait times for new vehicles, easing pressure on the second-hand market in turn. Some 19,440 new cars were registered in the second quarter, he said, representing an increase of 27.4 per cent compared to the same period last year.
Imports of second-hand vehicles also “increased slightly by 0.7 per cent” to 12,553 in the second quarter, further boosting supply, Mr Gillepsie said.
However, the proportion of imported vehicles coming from the UK declined to a new low of 28 per cent in the three-month period “in stark contrast” to the first quarter of 2020 when the share of all imported used cars coming from the UK was 93.6 per cent.
Car imports from the UK have been declining steadily since its withdrawal from the EU single market at the outset of 2021.
On the demand side, analysis of advertising metrics indicated a 9.7 per cent increase in demand for used vehicles in the second quarter of the year, down from 14 per cent jump in the first three months of the year, a typically busy period for buyers and sellers.
“This was coupled with a 7.7 per cent increase in the stock of used cars on DoneDeal and hence had a stabilising effect on prices,” said Mr Gillespie. The rebounding of supply and a stabilising of prices is encouraging from an affordability perspective.”
Meanwhile, the number of electric vehicles (EVs) and hybrid models hitting the second-hand market is also beginning to increase. The first quarter saw a tripling of the number of used EVs listed on DoneDeal to 1,500, which increased to 1,700 in the three months to the end of June.
While still only “a small percentage of the share of cars listed on DoneDeal [2.2 per cent],” Mr Gillespie said, “it is a large increase from the same period one year ago when EVs accounted for just 0.7 per cent of used cars listed on DoneDeal.
Consequently, average second-hand EV prices dropped 4.7 per cent in the quarter, the largest decline observed in any segment of the second-hand market since before the pandemic, according to the report.
