Soaring used car prices ‘driving cost of living crisis’

  • Average used car now costs 24 per cent more than five years ago, according to research
  • Second-hand cars now swallow up almost 50 per cent of average annual salary
  • Rise in used car prices predicted to continue into 2022

Time 8:40 am, February 3, 2022

The price of a used car has risen more steeply than even alcohol, tobacco, fuel and household energy over the past five years.

That’s according to research by online vehicle leasing broker Vanarama as Britain’s cost of living crisis deepens.

It used data from the Office for National Statistics and Auto Trader analysts and found there was a 24 per cent hike in the cost of the average second-hand car since 2017.

That was outstripped only by the costs of education, home ownership and audio-visual products.

Alcohol and tobacco, which are both subject to ever-rising taxes, showed a much steadier increase of just four per cent.

Meanwhile, house rentals, which stayed steady between 2018 and 2020, jumped by a third last year from 21 per cent to 32 per cent.

It also found that buying a used car now swallowed up more of an annual salary than five years ago, with the average used car price now accounting for 47.2 per cent of the average UK salary, versus 41.5 per cent in 2017.

Vanarama said the soaring costs had been driven by factors such as the lockdowns, which left many cars with lower mileages than expected, plus the impact of the global microchip shortage on new car availability.

Vanarama cost of living, Feb 2022

Source: Vanarama

But despite the difficulties of buying a car at the moment, Vanarama chief executive and founder Andy Alderson reckons there are still great deals out there with some smart shopping.

‘Generally, the UK cost of living increases year on year, but used car prices are rising quicker still, up 24 per cent in the past five years,’ he said.

‘Thanks to heightened demand and global supply issues, that’s likely to stretch into 2022.

‘However, there are still deals to be had for those in the market. Current stock avoids lengthy delays and paying over the odds for a second-hand vehicle.

‘It’s a tricky time to be on the search for your next car, but a little result and some patience will land you in good stead.’

Car Dealer founder James Baggott visited Vanarama’s head office and met Alderson for an exclusive tour and interview in 2020. You can watch the interview below:

John Bowman's avatar

John has been with Car Dealer since 2013 after spending 25 years in the newspaper industry as a reporter then a sub-editor/assistant chief sub-editor on regional and national titles. John is chief sub-editor in the editorial department, working on Car Dealer, as well as handling social media.

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