Used car market to be sustained by ‘core needs’ in 2024

Any negative impact stemming from the dire macro economic environment will likely be outweighed by the effect of used car supply shortages due to lower new car registrations through the pandemic, according to an industry expert.

Speaking at a Solera cap hpi market update, head of forecast strategy Dylan Setterfield said used car retailers would be confronted with a shortfall of around 2.37 million cars and that a significant part of the market would be propped up by a “substantial element of core needs purchases”.

He added that falls in used car values for the remainder of 2023 are expected to be larger than is typical for the time of year as the market remains challenged.

The start of 2024 is also likely to be constrained by forced registration activity at the end of 2023, although an improvement is expected later in the year as used volumes reduce.

The market for battery electric vehicles (BEV) will remain complex, according to Setterfield, with many looking to value compared to ICE equivalents or competitors following significant used car price reductions.

“Falling electricity price reductions are also likely to continue to soften media attitudes and support consumer demand,” he said. “Some of the mainstream media seem to be still showing an anti-electric bias but the kind of agenda seems to have eased away from demonising electric cars a little and the low levels of current prices do seem to be stimulating used demand.”