Why new car sales growth is good news for the used market

The UK's new car market grew by 28.3% in July, marking a full year of consistent growth. It is good news for the used car market.

July saw 143,921 new vehicles registered, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT). Within this, it was fleet sales, up over 60 per cent and business buyers, up over 28 per cent, that drove the increase. The private buyer market was static. For consumers, it seems the cost of living crisis could be biting.

The growth in new car sales over the last year will start to feed through into the used car market, and it is this new stock that the market is keen to gain access to because the new-3 sector has been sorely short of inventory over recent years.

The stock they will discover will have a nod to sustainability, with battery electric vehicles surging by 87.9% in July, and it does seem, based on reports by Cox Automotive and Autotrader, that after steady falls in used EV values, prices seem to be finding their level. It is supported by data that suggests the decline in diesel demand is continuing.

According to Indicata's data for June, used diesel sales only accounted for 36.54% of the June online B2C used vehicle market compared to 48.05% for petrol. Removing the diesel-dominated commercial vehicle sales saw diesel share of used car sales drop to 33.13% whilst petrol increased to 50.75%.

In the newer, new – 4 market, the growing appeal for EVs becomes clearer. Used diesel sales accounted for just 18.28% of the market, compared to 21.63% for hybrid and 53.87% for petrol, leaving BEVs to take the remaining 6.21%.

Looking at the sale of used cars under two years old, BEVs broke the double-digit barrier with 10.6% of sales, a new record. It also meant that they outsold diesel which only managed to secure a 9.22% share of sales. Interestingly used petrol sales are starting to be pursued by hybrids, with petrol taking 46.88% of sales whilst hybrid took 33.3%.

With more public chargers coming on stream, July saw a record high of 3,056 new standard public chargers installed; it does seem that in the used sector, EVs are gaining traction. Increased supply in the months ahead could be very welcome.

Debbie Mckay, Commercial Director of Motor Sales