Shortage of used cars expected to last until 2030
Supply constraints for nearly-new used cars are expected to remain until the end of the decade, according to Solera cap hpi.
Its analysis has found that the number of used cars aged between one and three years old fell from 5.19 million in 2018 to 3.18 million in 2024, a decline of almost 39%. Volumes in this age bracket have recovered to 3.76 million this year, but this increase is anticipated to slow with just 3.85 million vehicles in the used car market by 2030, which is 1.3 million below its pre-pandemic peak.
Solera cap hpi is also predicting similar shortages in the three-to-five-year age band, which has fallen from 4.98 million in 2020 to 3.05 million this year and expected to rise to just 3.83 million by 2030.
Meanwhile, supply of five-to-10-year-old cars is predicted to fall from 10.54 million vehicles in 2024 to 7.29 million by 2030.
Shortages are the result of a sharp decline in new car sales during the pandemic, with about 1.6 million annual sales from 2020 to 2022 compared to nearly 2.7 million sales in 2016.
New car sales
Dylan Setterfield, head of forecast strategy at Solera cap hpi, said: “The impact of the pandemic on new car registrations continues to work its way through the vehicle parc and is creating significant pressure in the age bands most sought after by dealers and consumers.
“While registration volumes have recovered in recent years, the market is still dealing with the consequences of several years of reduced supply. As a result, retailers should expect competition for quality nearly-new stock to remain intense for some time.”
He continued: “Our current forecasts indicate that the industry could face a second supply challenge later in the decade as manufacturers adapt to increasingly demanding VETS targets. We are already seeing cases where OEMs are either ceasing to produce petrol and/or diesel versions of some models or planning much-reduced ICE volumes in the coming years.
“If overall registration volumes decline, the impact will inevitably be felt in future used vehicle supply, extending the tight market conditions dealers are already experiencing. Obviously, this may change if the current targets are relaxed.”
