Used car sales rose 351.4% to near-record levels in Q2

Used car sales rose 351.4% to a near record 2.17 million sales during Q2 of 2021 as new vehicle supply shortages drove increasing volumes of motorists into pre-owned models.

Just days after Society of Motor Manufacturers and Traders (SMMT) chief executive Mike Hawes said COVID-19 prompted staff and semiconductor shortages had ‘throttled’ July’s new car registrations, the industry body revealed the same market forces had delivered a buoyant used car sector.

A total of 2,167,504 vehicles changed hands in the first half of the year amid strong demand as limited stock availability drove strong margins for retailers.

Limited stock availability resulted in the oldest profile of sold cars on record, with just 12.7% of vehicles sold being three years or under.

Hawes said that the strength of demand for used cars was “welcome news for the used car market”.

He added: “More motorists are turning to used cars as supply shortages continue to affect the new car market, and the increased need for personal mobility with people remaining wary of public transport as they return to work.”

Following the market’s near standstill under COVID-19 lockdown conditions in April last year, the SMMT reported that the month had delivered H1’s largest growth, with sales rising 307.4% year-on-year to 724,743 transactions. The result was also up 5% on April 2019.

May and June delivered their strongest used car sales performance ever, meanwhile, with volumes up by 9.9% and 4.6% on 2019.

Year to date the used car market is 33.3% up on 2020 to 3,855,259 units, but the sector remains 4.9% (almost 200,000 units) down on 2019.

Hawes said: “A buoyant used car market is necessary to maintain strong residual values which, in turn, supports new car transactions.

“We now need to see a similar rebound in new car sales to accelerate the fleet renewal necessary to deliver immediate and continuous improvements in air quality and carbon emissions.”

Electric vehicle and (EV) and plug-in hybrid (PHEV) sales more than tripled in Q2 – to 10,903 and 16,202 – but still account for just 1.3% of the market.

The SMMT conceded that the plug-in used car market was not yet seeing the acceleration of uptake anticipated, adding that the scale of the challenge to transition the entire used car parc away from traditional fuels “remains significant”.

Petrol and diesel powertrains made up 96.4% of the quarter’s used car market at 2,090,396 units.

All segments saw growth, with dual purpose seeing the biggest increase in Q2, up 147.7%, pushing their market share to 13.5%, still behind superminis (31.9% share) and lower medium (27.0%) segment volumes.