10:42 am, July 30, 2024
Used car dealers are expected to enjoy a strong second half of the year, despite experts predicting a ‘squeeze’ on supply.
New analysis from Auto Trader is forecasting that used car sales will rise by around 5% year-on-year between July and December, leaving the total number of transactions at around 7.6m.
The prediction tracks with data from the first half of 2024, which fuelled by strong levels of consumer demand, also enjoyed a 5% on the same period last year.
In more good news, July’s sales are currently on course to be 4% than last year with used cars selling an average of five days faster.
Auto Trader therefore believes that the market is on course to record an additional 350,000 used car sales this year, representing a rise of around 5%.
However the firm has warned retailers to be ready for ‘unprecedented shifts in supply dynamics’ which could cause drastic changes to forecourts over the coming months and years.
Among the biggest headaches which dealers are likely to face is a lack of stock coming through, aged five-years-old and younger.
Due to a lack of production during the pandemic, Auto Trader’s data shows that the number of sub-five-year-old cars on the road by the end of 2024 will be at its lowest since 1995. This year will also see 28% fewer cars under five-years-old than there were in 2019.
The problem, Auto Trader says, is particularly pertinent to brands whose sales volumes were already in decline, prior to the pandemic.
These include the likes of Vauxhall, Ford, and Mercedes, which will have 56% (560,000 cars), 54% (730,000), and 42% (310,000) fewer cars of that age cohort on the roads by the end of 2024 than they did in 2019.
On the flip side, a handful have seen volumes of this age cohort increase over the period due to more sales. Auto Trader predicts tat 2024 will close with seven times more sub-five-year-old MGs and Teslas on the road compared to 2019, and 9% more Kias.
EVs on the rise
Experts at Auto Trader are also reporting a huge surge in demand for used electric vehicles, with more and more people turning to greener vehicles.
The firm predicts that by the end of this year, around 4% of the cars on the road will be an EV, compared to 88% ICE. By 2033, that number will have risen to over a third, whilst the proportion of petrol and diesel will have shrunk to around half.
As a result, analysts say there will never be more sub-five-year-old petrol or diesel cars on the road than there are today. By 2028 around 33% of all under five-year-old used cars will be electric, up from around 15% by the end of 2024.
Reacting to the findings, Marc Palmer, head of strategy & insights, at Auto Trader, said: ‘2024 has had its challenges, but overall, it’s performed well, and based on the current trajectory our outlook for the rest of the year remains positive.
‘However, the heavily nuanced market retailers have had to manage over the last few years is only set to intensify, as the combination of supply constraints, more electric cars, and a changing brand landscape mean the parc will soon look very different.
‘With such a dramatic change in forecourt dynamics, sourcing, pricing and selling cars are going to require a blend of both instincts and insights to navigate the market ahead.’
