Used car shortages set to keep prices high despite falling demand, SVA says
01 July 2022
Author: Sean Keywood
Acute used car stock shortages are set to keep prices high for years to come despite slowing demand, according to Shoreham Vehicle Auctions (SVA).
The company's MD Alex Wright said that cost of living increases and rising inflation had impacted retail used car demand during 2022.
Shortages are due to 1.72 million fewer new cars than expected being sold between January 2020 and May 2022, as well as dealers retaining a greater percentage of part exchanges against new car sales.
Wright said these trends combined had created a wholesale used car shortage of over two million since Q1 of 2020, which put into perspective how the sector had been badly affected by market conditions.
"The market is so short of stock that even if demand remains depressed for a prolonged period prices will remain strong. We do not predict a price crash like we've seen in previous years as each month the supply shortage is getting worse.
"We believe prices will stay at their new normal for another two to three years while the hole in the used car supply is slowly filled,"