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Investigation: What happens next to used car prices in 2022? When will used car prices fall?

  • War in Ukraine is affecting new car production and increasing cost of living
  • Will supply issues cause a squeeze and push used car prices up?
  • Or will inflationary pressures and cost of living squeeze tamper demand?
  • Experts explain which will impact used car prices more

Time 11:27 am, March 23, 2022

The devastating war in Ukraine has severely impacted new car production and pushed up the cost of fuel and energy prices.

However, used car experts have told Car Dealer it’s hard to predict which will have the bigger impact on used car prices this year.

New car production lines have been stalled as parts supplied by Ukraine and Russia have seen deliveries of key components impacted.


This has exacerbated problems caused by the long-running semiconductor shortages that has seen most new car waiting lists stretch beyond six months.

The shortage has been the biggest factor in pushing up used car prices by more than 30 per cent in a year.

However, the war has also impacted fuel and energy prices and this dramatic increase in the cost of living is hitting consumer confidence.

But which factor will have the biggest impact in the used car market?


‘I think it is important that we remember the conflict in Ukraine is first and foremost a humanitarian tragedy and presents much larger issues – but we are seeing an effect within the automotive sector,’ Philip Nothard, insight and strategy director at Cox Automotive, told Car Dealer.

‘Some manufacturers have been affected more than others but there are recent reports that almost 20 million electric cars will be taken out of production due to the lithium shortage and impact of the conflict.’

Motor industry analysts are already downgrading the future performance of listed dealer groups as a result. 

Zeus Capital has moved Pendragon’s revenue potential this year down by 2.3 per cent as a direct impact of the war.

Production line stoppages

Cap HPI’s head of forecast strategy Dylan Setterfield told Car Dealer that VW Group, BMW, Mini and Mercedes had all been particularly impacted by the war in Ukraine.

He said production of wiring harnesses made in the country for mostly German-based manufacturers had been impacted and stalled new car production lines.

He said: ‘The Volkswagen Group appears to have suffered the most disruption across multiple brands and particularly BEVs on the MEB platform.’

Setterfield said BMW plants in Munich and Dingolfing were closed for a week, the Mini Oxford plant shut for two weeks and Mercedes suffered brief delays. 

All are now back up to full production, but there will be knock on impacts.

‘Some suppliers in Eastern European countries have suffered from minor reductions in available workforce as some Ukrainian employees return to their country to fight in the war, but remarkably there is still some production coming out of the Ukraine,’ he added.

Most manufacturers, though, have now managed to source affected parts from other suppliers to keep production lines running, but the delays will take time to overcome.

Cap HPI’s expert added: ‘Any reduction in new and used car volume from the war in Ukraine is expected to be relatively short-term and our expectation is that any potential positive impact on used car prices will be outweighed by the softening of consumer demand as a result of the cost-of-living squeeze.

‘Our outlook remains that most of the remainder of this year will be much tougher for those selling used cars than it has been for the past 12 months.’

Nothard agrees and warns dealers to brace themselves for further declines in prices for ‘some makes and models moving forward’.  

‘Although there are reports that consumer demand is easing and price pressures are creeping in, we need to remember that supply remains constrained in the main,’ he added.

Dramatic impact

Shoreham Vehicle Auctions boss Alex Wright believes this supply constraint will have a ‘dramatic’ impact on the used car market.

He said: ‘Retail car demand has started to fall in recent months due to the rising cost of living, particularly with rising energy and fuel prices. 

‘This fall in demand for used cars, though, is not reducing prices simply because the supply of used cars is so restricted.’

He predicts it will be well into 2023 before any significant falls in used car prices are noted.

Fellow auction house boss Martin Potter who runs Aston Barclay says he has seen used car prices ‘soften’ in recent months as price rises squeeze consumer spending.

However, he thinks new car supply issues will see most dealers turn to their used car pitches to keep the wheels turning – and that will keep prices high.

He told Car Dealer: ‘As dealers rely on used cars to make up for their new car supply challenges, we don’t see prices moving dramatically downwards in the next few months.

‘We are still in a market where demand exceeds supply and that will continue while there are a restricted number of new cars coming into the market. 

‘This now looks likely to continue into 2023 so prices will stay strong.’

Kevin Roberts, director of industry insights and analytics at CarGurus, said the advertising platform had recorded average used car listing prices on its site were up 38 per cent year on year – he said he can’t see that changing any time soon. 

He said: ‘The ongoing conflict in Ukraine is impacting new vehicle production, and has a chance to further increase used vehicle prices or keep them at their current highs for a longer period of time.’

No price crash

Cap HPI’s valuation experts have reiterated their previous comments that they don’t think there’s a used car price crash on the horizon.

Setterfield said: ‘This is still very much a market adjustment from a remarkable high point and not a used car price crash. 

‘Values will still remain considerably higher than they were pre-pandemic and many leasing and rental businesses will continue to enjoy significant gains on disposals for some time to come.’

Steve Young, boss of automotive industry analyst firm ICDP, said the outlook still looks challenging for the ‘next two years’.


He thinks that inflationary pressures will temper consumer spending on used cars and in turn reduce demand. 

He thinks this could offset any further supply issues caused by new car factory stoppages. In effect, one will cancel the other out.

He said: ‘The overall environment seems to be extremely challenging on multiple fronts, and I cannot see how real economic growth can be sustained in these circumstances.  

‘I feel that we are likely to see a slowdown in consumer spending which will dampen demand for new and used cars, potentially starting to ease supply problems, but with high prices compared to historic levels.’

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Haymarket’s Jim Holder leads consumer publications including Autocar and What Car? and thinks used car prices could remain high ‘for years to come’.

He said: ‘At this point it feels like the only limiting factors are used car prices bumping too close to new ones to be justifiable for buyers.’

Watch our special investigation video into used car prices below. Why did they go up in the first place? And when do experts think they could fall again?

James Baggott's avatar

James is the founder and editor-in-chief of Car Dealer Magazine, and CEO of parent company Baize Group. James has been a motoring journalist for more than 20 years writing about cars and the car industry.

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