Covid-19 and Brexit-induced shock to the market have meant used car prices are now nearly 50 per cent higher than they were just before the onset of the pandemic in February 2020, a new report claims.
“Price inflation is on an unprecedented upward trajectory and showing no signs of slowing down,” said Tom Gillespie, environmental economist at NUI Galway and author of the latest DoneDeal Car Price Index.
“In just three months since June, used car prices have increased by 10.6 per cent, the largest quarterly price inflation seen in used car prices in Ireland since the start of the DoneDeal data in 2011.
“For context — the previous quarterly inflation rate in Q2, Q1, and Q4 2020 was 6.6 per cent, 5.6 per cent, and 3.5 per cent, respectively. So not only are prices still increasing but also the rate of increase is speeding up, not slowing down.”
Dr Gillespie said choked supply due to Brexit and pandemic-induced delays on the production of new cars, coupled with increased demand from increased savings, are being widely cited as causes for the abnormal price growth.
“Used car prices are now nearly 50 per cent higher than they were just before the onset of the pandemic in February 2020,” he said. “These contributing factors are showing few signs of abating in the short term.”
Dr Gillespie highlighted just how short supply now is compared to previous years.
“In 2019, the last ‘normal’ year in the used car market in Ireland, there were about 117,000 new car registrations and 114,000 used car imports, meaning a total of 231,000 extra cars in Ireland.
“By comparison, there were 168,294 extra cars added to supply in 2020 and there have been 151,782 so far in 2021.”
The survey published in the report found that 40 per cent of Irish people intend to purchase a car this year, while 60 per cent of people say that they intend to spend a minimum of €15,000 on their next car. That is unchanged since the first half of the year.
Some 45 per cent of people in Ireland said they intend to buy a hybrid or electric car, up from 35 per cent since the start of this year.