Topic: used vehicles
The second half of 2022 started off with some subtle shifts in pricing and inventory trends, hinting that we could see additional changes in the coming months.
As we reach the midpoint of the year, the UK remains an outlier in the used vehicle market, especially compared to the US and Canada.
Higher-priced vehicles continue to impact the data, although not in quite the same way as last year, as consumers seem to have shifted their buying preferences from any vehicle to a vehicle under £20k — and, ideally under £10k.
April saw a continuation of trends from March with inventory levels effectively flat (up 0.005%) from March and year-over-year levels remaining positive compared to heavily impacted 2021 COVID levels.
The UK market saw a shift in March that was contrary to North American markets, with inventory levels improving for used, but due to an increase in inventory below the average listing price instead of above it.
February ended up being a near carbon copy of January’s results, as month-over-month variances were relatively small – however, particularly for prices, the year-over-year values remain elevated.
January’s data can be viewed as glass half full or glass half empty. On the glass half full side, used inventory levels are up 6% compared to last year. However, on the glass half empty side, our index decreased 3.8% from December. While the increase from last year is a positive, the drawdown in inventory from last month could be hinting at a further decrease in the coming months as sales seasonally increase.
2021 ended as expected, with used inventory levels rising – however, prices and days-on-market didn’t see any relief. The CarGurus UK Used Vehicle Availability Index increased by 6.5% compared to November and is now up 7.1% year-over-year – overall, this is effectively as great a recovery as we’ve seen in inventory volumes. However, this increase in inventory is expected, as December is historically the lowest month for used vehicle sales, which is the likely source of the inventory increase. Supporting indicators, too, show more volatility underneath the surface.
With used vehicle sales down 6.3% in the third quarter and a likely seasonal slowdown in demand in November/December, it’s not surprising to see used inventory levels increasing. In November, the CarGurus Used Vehicle Availability Index reading came in at just over 96, an increase of 6.9% from October – yet, compared to last year, things are relatively flat with inventory up just 0.6% from last year. However, it is surprising to see that even with demand slightly down, we saw no relief on pricing.
There had been a hope that August could be a turning point in the ongoing chip shortage currently battering the global automotive industry; however, that hope came and went with the reality that a resolution in 2021 is not likely. In fact, the UK now looks to be experiencing a direct hit from the chip maelstrom that we’ve seen in other markets in recent months.