UK used car sales double to second-quarter record

UK used car sales soared to their best ever second quarter, lifted by pent-up demand as lockdown restrictions eased, according to the motor industry trade body.

The global chip shortage has constricted the supply of new cars but boosted purchases of used vehicles, which doubled to about 2.17m units in the three months to June compared with the same period a year ago, data from the Society of Motor Manufacturers and Traders showed on Tuesday.

Mike Hawes, chief executive of SMMT, said the results were a relief for car dealerships whose businesses have been hit by Covid-19 restrictions.

“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,” he said.

Sales of second-hand cars in the last quarter surpassed pre-pandemic levels by 6.6 per cent but were roughly similar to the period from July to September 2020, when restrictions from the UK’s first lockdown were lifted. Summer is one of the busiest seasons for used car transactions.

Prices of used cars have been steadily rising in recent months because of a supply and demand imbalance set off by the global health crisis and crunch in semiconductor supplies.

The UK car industry suffered its worst drop in sales last year since 1943, with the number of new cars bought falling below 2m for the first time in more than a decade.

The industry is still struggling to get production back to full speed. Carmakers have warned that the chip shortage is expected to last to next year. The supply squeeze has left many consumers without the option to buy certain models or facing long waiting times while dealers restock.

SMMT reported last week that new car sales had their weakest July since before 2000. The trade body revised its annual outlook for registrations to 1.82m units, down about a fifth on the average of the past decade.

To meet demand for vehicles, more old models have entered the market. Only 12.7 per cent of used vehicles sold between April and June were three years old or under, the lowest percentage on record.

However, Hawes said strong second-hand trade bodes well for newer brands. “A buoyant used car market is necessary to maintain strong residual values which, in turn, support new car transactions,” he said.

Plug-in electric cars also recorded a big jump in used sales as drivers clamoured for greener transport options but remained a tiny fraction of the overall market at 1.3 per cent.

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