Row of used cars at a dealership, representing the UK used car market from 2010 to 2024

UK Used Car Market Evolution: 2010-2024 Overview

The UK used car market has seen dramatic shifts over the past decade, influenced by economic conditions, supply chain disruptions, and changing consumer behaviour. From the post-2008 financial crisis recovery to the COVID-19 pandemic’s impact, used car prices and availability have been subject to significant fluctuations. This article explores the trends in used car prices from 2010 to 2024, examines the factors driving these changes, and considers whether now is the right time to buy or hold on to your vehicle. We also delve into the cost of servicing and maintenance in the current market, providing a comprehensive overview of the state of the UK’s used car market.

The UK Used Car Market: 2010-2020

Post-Financial Crisis Recovery (2010-2015)

In the aftermath of the 2008 financial crisis, the UK economy experienced a slow recovery. During this period, the used car market became an attractive option for many consumers seeking to avoid the depreciation associated with new vehicles. As a result, used car prices remained relatively stable from 2010 to 2015, with only moderate increases driven by inflation and a gradual return to economic stability.

According to data from the Office for National Statistics (ONS), the average price of a used car in the UK in 2010 was approximately £7,000. By 2015, this figure had increased to around £8,500, reflecting a combination of inflation and increasing demand for quality used vehicles​(

The Rise of PCP and Finance Deals (2015-2020)

Between 2015 and 2020, the UK saw a significant shift in car buying habits, with Personal Contract Purchase (PCP) and other finance deals becoming more popular. These finance options made new cars more accessible to a broader audience, particularly younger buyers, who were drawn to the lower monthly payments and the ability to upgrade vehicles regularly.

As a result, the influx of nearly new cars into the market led to a glut of high-quality used cars, which put downward pressure on prices in the mid-2010s. However, by 2019, with the uncertainty surrounding Brexit and economic slowdown, consumers began to favour used cars again, leading to a stabilization of prices​.

The COVID-19 Pandemic and Its Aftermath (2020-2022)

Disruption and Demand Surge

The COVID-19 pandemic in 2020 marked a significant turning point for the UK used car market. The pandemic disrupted global supply chains, leading to shortages of new cars due to delays in the production of semiconductor chips and other essential components. This scarcity of new vehicles caused a surge in demand for used cars, driving prices to unprecedented levels.

In 2021, used car prices in the UK soared by an average of 20%, with some models experiencing even steeper increases. This surge was driven by a combination of pent-up demand, a limited supply of new cars, and consumers’ growing preference for personal transportation over public transport amid health concerns​(

The Peak of Used Car Prices

By late 2021 and early 2022, the UK used car market was experiencing a peak in prices. For example, a three-year-old Ford Fiesta, one of the UK’s most popular used cars, could fetch close to its original purchase price—a phenomenon unheard of in the pre-pandemic market. The average price of a used car in the UK exceeded £15,000 by mid-2022, more than double the average price a decade earlier​(

This period also saw increased activity in the online car retail market, with platforms like Auto Trader and Cazoo reporting record levels of searches and transactions. Consumers, unable to secure new vehicles, turned to the used market in droves, further exacerbating the price increases​(

The Current State of the Market: 2023-2024

Cooling Off Period

As 2023 progressed, the UK used car market began to cool off. The supply chain issues that had plagued the new car market started to ease, albeit gradually, leading to an increase in the availability of new vehicles. This, in turn, began to reduce the pressure on the used car market.

By mid-2023, used car prices started to stabilize, although they remained elevated compared to pre-pandemic levels. The average price of a used car in the UK settled around £14,000, still significantly higher than in previous years but lower than the peaks seen in 2021 and 2022​.

Factors Influencing the Market

Several factors continue to influence the used car market as of 2024:

  1. Economic Uncertainty: The ongoing cost of living crisis, driven by high inflation and energy costs, has led consumers to be more cautious with their spending. This has resulted in a more selective approach to car buying, with many opting to hold onto their vehicles longer rather than purchasing new ones​(Aston Carter).
  2. Interest Rates: Rising interest rates have made car finance deals more expensive, discouraging some buyers from entering the market. This has also contributed to a slight reduction in demand for used cars​(Prism Executive Recruitment).
  3. Environmental Concerns: The push towards electric vehicles (EVs) is also starting to impact the used car market. While EVs currently represent a small fraction of the used market, their growing popularity is expected to influence demand for traditional petrol and diesel vehicles over the coming years​(Office for National Statistics).

Is Now a Good Time to Buy or Hold?

Buying in 2024

For those considering purchasing a used car in 2024, the market remains favourable in many respects. Prices have cooled from their 2021-2022 peaks, and the increased availability of new cars means that consumers have more choices. However, prices are still higher than pre-pandemic levels, and the economic climate suggests that buyers should proceed with caution.

If you’re in the market for a used car, it’s advisable to:

  • Shop Around: With prices stabilizing, there’s more room for negotiation. Use online platforms to compare prices and find the best deals.
  • Consider Financing Costs: With rising interest rates, it’s important to factor in the total cost of financing, not just the sticker price of the car.
  • Think Long-Term: With the shift towards electric vehicles, consider how future regulations and market trends might affect the value and usability of your chosen vehicle.

Holding On to Your Car

For current car owners, holding onto your vehicle might be a wise decision, especially if your car is in good condition and has relatively low mileage. The costs associated with selling and purchasing another vehicle—especially in a market where prices are still high—might not be justifiable.

Additionally, the cost of servicing and maintenance has also increased over the past few years, reflecting the broader inflationary pressures in the economy. According to the RAC, the average cost of a full car service in the UK increased by 10% between 2020 and 2023, with further increases expected as parts and labour costs rise​(

Aston Carter). Given these factors, keeping your current vehicle in good running order could be more cost-effective than entering the used car market again.

Servicing and Maintenance Costs: A Key Consideration

The cost of servicing and maintaining a vehicle has become a significant consideration for UK car owners. With inflation driving up the cost of parts and labour, maintaining a vehicle is now more expensive than ever. The average cost of a full service in the UK now stands at around £270, up from £245 in 2020​.

These rising costs mean that older vehicles, which typically require more frequent repairs and maintenance, might become more expensive to keep on the road. This has led some car owners to consider whether it might be more economical to upgrade to a newer, more reliable vehicle, despite the high prices in the used car market.

The Future of the UK Used Car Market

Looking ahead, the UK used car market is likely to continue evolving in response to broader economic and environmental trends. The shift towards electric vehicles, in particular, could have a profound impact on the market, as consumers and governments alike push for a reduction in carbon emissions.

However, with the cost of living crisis showing no signs of abating, affordability will remain a key concern for many consumers. The used car market is expected to remain active, but buyers will need to navigate the complexities of a market that is still adjusting to post-pandemic realities.

Conclusion

The UK used car market has undergone significant changes over the past decade, with prices rising sharply during the COVID-19 pandemic due to supply chain disruptions and increased demand. While prices have started to stabilize, they remain high compared to pre-pandemic levels, and the cost of servicing and maintaining a vehicle has also increased.

For potential buyers, the current market offers opportunities but requires careful consideration of financing costs and long-term trends. For current car owners, holding onto your vehicle may be a prudent choice, given the rising costs associated with buying and maintaining a new or used car.

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