Will Used Car Prices Return to Normal?
Derren Martin, director of car valuations CAP HPI believes that the scarcity of new cars being produced could keep used car prices buoyant for years.
The global shortage of micro-chips has resulted in car manufacturers producing the fewest new vehicles in over 60 years. 18 month waiting lists exist for some models and other brands are having to cancel orders entirely due to issues experienced with obtaining parts. These difficulties and delays contributed to average used car price increases of 27.6% during 2021. Certain second hand cars rose in value by up to 60% in 2021.
The expert used car value specialist forecasts that the knock on effect might prevent prices returning to their pre-pandemic lows. Whilst discussing the outlook for used car prices with Car Dealer Magazine Martin said, ‘I think they will stay strong. They can’t stay where they are longer term but they will return to a level where the market is comfortable with them.’
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Martin’s positive sentiments are supported by the fact price rises slowed over November through to the end of January but avoided dramatic falls. Before the pandemic struck there were 2.3 million new cars registered in 2019. This figure fell in 2021 to just 1.6 million.
The CAP HPI man estimates a shortfall over a 3 year period of 2 million new vehicle registrations. They obviously won’t exist to enter the used market in due course. So “undoubtedly” some shortages will remain. This “scarcity” in Martin’s opinion will have the result that prices will not ‘come down nearly as much as they went up by’.
Our motor trade insurance clients can take further comfort from the fact that people will now expect to pay more for used cars and in many cases will have additional funds available due to the higher value of their existing vehicle.
Used Car Sale Volumes Strong in 2021
The sky high used car prices didn’t prevent used car dealers completing significantly more transactions in 2021. The used car market completed 11.5% more deals year on year . According to figures released by the SMMT over 7.5 million used car sales occurred during the year. This was 777,997 more than in 2020, which unsurprisingly was troubled at points by low consumer and business confidence as well as being interrupted by lockdowns.
The Ford Fiesta was the best-selling used cars of 2021 with 70,494 units sold. Superminis remained most popular body type with nearly a third of the market opting for one (32.7%). And black took the title as most popular colour with used car buyers.
The uptick in used car sales was aided by record levels of demand for used battery-electric vehicles. The used EV market underwent a 119.2% increase with 40,228 transactions. Ultra-low and zero-emission models began filtering through to second owners in larger numbers and combined to make up 3.1% of sales.
Despite the positive figures, 2021’s overall used car sale totals remained 5.5% below the 5 year average prior to the pandemic. Though the outlook was at least a step in the right direction and 2021’s figures were themselves impacted by the Omicron variant in the last month of the year.
The used cars that increased in value the most in 2021
Cap HPI also published new data that further highlights the phenomenal surge in prices throughout 2021. They announced their Top 25 list of the biggest increases against specific make and models.
The figures compiled by the valuations experts at Cap HPI indicate that the cars that underwent the largest increases in price in 2021 were very much in the functional space. MPVs and SUVs led the charge.
The 2012-2019 Toyota Auris Hybrid came out on top as the biggest riser with an increase in value of almost 70%! An owner of a three year old model with 30,000 miles on the clock could expect to see its value to increase by 68.8%. That equates to an incredible return of £6,904 over the year.
Even the vehicle to take last spot on the list, the Dacia Sandero still experienced a price rise close to 50%.
These significant price increases are expected to be isolated to 2021 and are unlikely to be repeated. See the full list below.
Top 25 Cars that increased the most in price between January 2021 and January 2022
Average Price %
IncreaseAverage Price
Increase1. Toyota Auris Hybrid (2012-2019)68.8%£6,9042. Vauxhall Zafira (2012-2018)64.9%£5,8613. Kia Soul (14-19) Electric64%£6,8504. Vauxhall Combo Life (18- )63.3%£5,2155. Mercedes-Benz V-Class (14-19) diesel59.3%£15,2466. Citroen Grand C4 Space Tourer (18- )58.4%£7,1007. Toyota Verso
(09-18)58.2%£6,4968. Suzuki Baleno
(16-19)57.5%£2,9889. Citroen Berlingo Multispace (08-18)55.9%£4,70810. Hyundai i800 (18-20) diesel55.5%£7,46311. Skoda Rapid (12-19) diesel55.4%£3,77512. Hyundai Ioniq (16-20) Hybrid55.3%£6,01513. Vauxhall Mokka (12-20)55.2%£4,64914. Citroen Space Tourer (16- ) diesel53.4%£8,91415. Seat Alhambra (10-20) diesel53.4%£7,75916. Peugeot 308 (13-21) diesel52%£4,51617. Peugeot Partner Tepee (08-18) diesel51.7%£4,48518. Vauxhall Viva
(15-19)51.6%£2,41719. Volvo V40
(12-19)51%£5,26620. Renault Captur (13-20) diesel50.5%£4,28421. Ford C-Max
(10-20)50.3%£4,35422. Skoda Rapid
(12-19)50.3%£3,47323. Suzuki S-Cross (13-21)49.7%£4,81324. Ford Galaxy (15-20) diesel49.4%£7,18425. Dacia Sandero (13-20) diesel49.1%£2,569
