The used car market grew by 4.1 per cent during the first quarter of 2023, reversing three consecutive quarters of decline.

That’s according to figures published this morning by the SMMT, which said 1,847,149 transactions took place between January and March – an extra 72,798 cars versus the same period in 2022, as growth in the new car market improved availability.

In what it hailed as the best start to a year since 2020, the industry body said used car sales posted robust growth in each month as demand continued to recover after the pandemic.

It saw rises of 3.6 per cent in January, 4.4 per cent in February and 4.3 per cent in March.

However, transactions during the quarter will still 8.6 per cent below pre-pandemic levels, which the SMMT said reflected the ongoing impact of supply challenges and consumer sentiment because of the economic backdrop.

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Battery-electric vehicles (BEVs) were the fastest growing powertrain, with transactions rising 56.5 per cent to 26,257 units, representing 1.4 per cent of the market – up from 0.9 per cent last year.

Plug-in hybrids (PHEVs) also changed hands in greater volumes, by rising 13.9 per cent to 16,006 units.

As a result, plug-ins comprised 2.3 per cent of sales – up from 1.7 per cent last year as more and more zero-emission vehicles entered the second-hand market. Hybrids (HEVs) also grew, by 38.2 per cent to 49,182 units.

Top 10 used cars in Q1 2023

1. Ford Fiesta – 80,477
2. Vauxhall Corsa – 59,963
3. Volkswagen Golf – 57,549
4. Ford Focus – 57,321
5. Vauxhall Astra – 41,116
6. Mini – 40,880
7. BMW 3 Series – 39,922
8. Volkswagen Polo – 36,040
9. Nissan Qashqai – 32,056
10. BMW 1 Series – 29,393

Source: SMMT

While demand for used electrified vehicles continues to grow, conventional powertrains remain dominant, with petrol transactions rising 4.5 per cent to 1,048,015 units and diesel sales up marginally by 0.2 per cent to 706,282 units. Combined, ICE cars accounted for 95.0 per cent (1,754,297 units) of the market, a fall of 1.2 percentage points on last year.

Superminis remained the most popular vehicle type at almost 600,000 transactions. However, despite posting volume growth of 3.3 per cent, their market share slipped to 32.3 per cent from 32.6 per cent last year.

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Mike Hawes, SMMT chief executive, said: ‘Easing supply chain challenges have re-energised new car registrations, unlocking availability in the used market and, importantly, delivering more zero-emission capable vehicles to second and third owners.

‘Sustaining that growth is vital for our environmental goals, which means bolstering the new car market to drive supply to the used sector.

‘Infrastructure rollout must also improve – and at speed – with affordable and reliable charging essential if more used buyers are to switch to the latest and cleanest available vehicles.’

What the industry says

Used EV market isn’t where it should be

Given the stream of negative headlines, for many people the outlook for 2023 didn’t look promising.

But against a backdrop of political and economic uncertainty, the used car market has gone from strength to strength this year, fuelled by very robust levels of consumer demand.

Our outlook for the rest of the year remains confident, but there’s no doubt that sales growth is being hampered by the dearth of new car sales over the course of the pandemic.

Although the positive uptick in sales is promising, our data shows that the used EV market isn’t where it needs to be if we’re to reach the government’s 2030 ambitions.

Ian Plummer, commercial director, Auto Trader

A welcome return to form

2023’s strong start marks a welcome return to form for the second-hand market, which saw total sales shrink by 8.5 per cent in 2022. Now as supply constraints ease, sales numbers are climbing and prices are levelling off.

Last year’s shortage of used cars for sale pushed up the average prices of many of the most in-demand models.

With double-digit consumer inflation squeezing people’s disposable incomes and the prices of brand-new cars following suit, many would-be buyers are looking to the greater value of the second-hand market instead.

Mark Oakley, director, AA Cars

Ulez expansion poised to drive further growth

Motorists frustrated with lengthy wait times for new cars turned to the used market to get exactly what they wanted in a fraction of the time, especially at the nearly new, premium end of the market.

With the cost-of-living-crisis impacting consumer spending power, people have been quick to turn to the used car market for more value.

One key driver of used car sales is likely to be the forthcoming Ulez expansion on August 29, which will see more car owners selling their non-compliant models ahead of the summer to switch to compliant petrol, diesel and EV models.

With some used electric prices dropping, we expect to see more drivers make the leap to EVs in 2023, as demand continues to surge.

Alex Buttle, co-founder, Motorway

Market should start to settle

Though the figures are still not quite at pre-pandemic levels, this should start to settle the market, with more affordable used cars available to drivers in the coming months.

Crucially, demand for used electric cars continues to grow.

‘For dealers, this year will likely involve changes to their forecourts to ensure they’re equipped to sell alternative fuel vehicles.

That means installing charging points, brushing up their knowledge and using market insight to ensure they’ve got the right models at the right prices.

Lisa Watson, director of sales, Close Brothers Motor Finance

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