Massive spike in used car prices during pandemic, according to new study
The rate of inflation shows little sign of slowing down.
Used car prices are now almost 50% higher then they were just before the onset of the Covid-19 pandemic in January of 2020, according to new data released on Monday morning (11 October).
The study, conducted by DoneDeal.ie, cites both the pandemic and "Brexit-induced shock" on the number of available imports for the "staggering effect" seen on used car prices.
The rate of inflation shows little sign of slowing down, too, with prices increasing by 10.6% since June of 2021 – the largest quarterly price inflation seen in used car prices since 2011.
Increased demand on the back of pandemic-driven household savings is also a factor in the "abnormal" price spike.
"On the demand side, the pandemic has increased the reliance on cars," the report notes.
"For example, people moving out of cities are necessarily more reliant on cars as public transport is less developed and operating at a reduced capacity due to restrictions."
The study underlines that with fewer options for spending and little to no overseas travel in 2020, budgets for high-end items such as a home or a car have visibly increased.
"Enquiries on both new and used cars for sale on DoneDeal have increased significantly. Phone calls and emails sent to car dealers and sellers in 2021 grew by 20% vs 11% in 2019."
It is estimated that around 111,000 additional cars are needed in order to bring prices back to "normal" pre-pandemic levels.
There has been a 10% increase on the second quarter of 2021 in terms of people purchasing vehicles in cash. According to the study, cash buyers make up 50% of the current car market.
You can view the report in full here.