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Cox Automotive is forecasting a “relatively slow” improvement in the UK used car market for the remainder of 2023.
It predicts used car transactions for 2023 to be 7,154,047 units, a 4% year-on-year increase, but still below (-3%) the average pre-pandemic yearly figure. It said a significant recovery is not expected until early or mid-2024..
Philip Nothard, Insight and Strategy Director at Cox Automotive, said: “The global loss of 42 million new vehicles in production has permanently impacted the future composition of the used market.
“However, our analysis points to a steady improvement in the UK sector for this year, which can be partly attributed to production cycles moving back to near normality.
“It nevertheless remains a changing landscape and the impact of supply and demand on valuations in the used sector has become increasingly evident in recent months.”
He added that concerns of a “cliff edge” in used vehicle values should diminish once the economy stabilises.
On used electric vehicles Nothard said: “The current state of the electric vehicle market poses a potential risk for the used car sector. While 64% of franchised dealers stocked BEVs as part of their used vehicle inventory in 2022, just 11% of independent dealers did.
“This creates uncertainty around the pricing and availability of pre-owned electric vehicles, which could lead to cautionary buying behaviour from both retailers and consumers.
“By the end of 2023, more than a fifth of 0-1-year-old vehicles in the UK parc is expected to be a BEV, and this figure is projected to increase to 41% for 1-3-year-old cars by 2027. To keep pace with this rapid market shift, the sector must prioritise education, knowledge-sharing, and legislative measures to support the ownership and stocking of pre-owned electric vehicles.”