Drivers ‘being priced off the road’ as affordable used cars vanish
Low-income households hit hardest by soaring price of used cars, with 25% drop in supply of sub-£2,000 models
Poorer drivers are being priced off the road due to a shortage of used cars at the most affordable end of the market, according to experts.
The last 12 months have seen an unprecedented rise in the value of used cars and industry observers are warning that this is making it harder to find models at the lowest end of the market.
According to figures from one car-buying specialist, supplies of cars valued at £2,000 and below fell by 25% in 2021 as demand for used cars rose, pushing up prices.
The average price of a second-hand car on Auto Trader is £17,816 but Henry Smith, strategy manager for car buying website Desperate Seller, warned that many buyers can’t afford anywhere near that when shopping for a used model.
He said there was a “dire shortage” of vehicles at the lower end of the market, which risked compounding the pressure on household budgets caused by the rising cost of living.
Average used car prices have risen by 30% since the start of 2021 and Mr Smith said: “This worsening situation could result in vehicles being out of reach for low-income households, the people who often rely the most on having a reliable car.”
He said the fall in the numbers of cars at the lowest price point was being driven by two factors: “First, the shortage of new car availability in the past two years is being felt in the used sector. On the supply side, fewer cars are coming off of leasing and PCP agreements, at a time when used car demand has increased due to the new car shortage we are seeing in the market. This is causing used car stock available in the market to fall.
“In addition, the supply-demand imbalance is pushing prices up across the used car chain, meaning there are fewer affordable vehicles available. While some car owners may find that their motors are suddenly worth considerably more, many consumers without the extra budget to spend are left out in the cold.”
Data collated by Desperate Seller from more than 500,000 adverts across multiple online selling services found that there were 23% fewer sub-£2,000 Fords on sale in December 2021 than in April 2021, and 17% fewer Vauxhalls.
Mr Smith added: “With stock availability dropping for key car brands, consumers are faced with less choice, and potentially a longer distance to travel to see these cars in person, a luxury many shopping in this price bracket cannot afford.“