Used car prices surge nearly 50% due to pandemic, Brexit – report
Used car prices are now nearly 50% higher than they were just before the onset of the pandemic in January 2020, according to a new report by online marketplace, DoneDeal.ie.
The research says the spike has been caused by a combination of the pandemic hitting supplies of new cars, as well as Brexit-induced trade barriers.
The situation has been made worse by strong demand driven by the growth in household savings during the pandemic.
The analysis, by Trinity College Dublin and National University of Ireland Galway economist Dr Tom Gillespie, finds that in the three months since June used car prices have increased by 10.6%.
This, the study claims, is the largest quarterly price inflation seen in used car prices in Ireland since the start of the DoneDeal data in 2011 and compares to 6.6% in the previous quarter.
The research warns that not only are prices still increasing but also the rate of increase appears to be speeding up.
Depreciation and increased mileage is still having an effect of making cars cheaper, it says.
But overall price inflation from the tightness in the market is negating that effect causing an appreciation in value for many models.
The problem appears to be worst at the lower end of the market where supply is constrained due to fall out of the end of life Celtic Tiger cars and Brexit reducing the number of imports.
Inflation is lower in the upper quarter of the market in cars worth €13,000 or more, running at 3.9%
It finds that in order to bring prices back to more normal levels, in the region of 110,000 additional cars are needed.
Cash buyers make up around 50% of the market at present, DoneDeal says.