Six essential used car stats that dealerships need to know

The UK used car market has gone through some challenging months – and one particular point of concern has been the values of used electric cars. In late 2022, values plunged (and leads dipped) thanks to hiked energy prices, lack of government-backed used car incentives and – even against the backdrop of falling values – comparatively high prices against diesel and petrol equivalents. However, data in heycar’s Q2 2023 Headlights report suggests that the tide could finally be turning for used EVs: average prices on heycar jumped 4% between April and June, and leads skyrocketed 67% during the first half of the year. For discerning dealerships, this means that investing in used EV stock could be a smart move heading into the second half of 2023. “Savvy dealers will take this as a sign that used EVs have a place on forecourts, which will inevitably grow over time,” says heycar CEO, Karen Hilton. “A quick glance at new car sales figures assures us that the ratio of electric to ICE is only going one way, and while we are not giving the all-clear on either EV values or consumer demand, there is no question that they will become far more common in the used car market as the decade progresses. The question, then, is how we make the most of them.” That’s not the only shift in the used car market that’s useful to know. Data shows that interest in used diesels is on the rise, while used coupé values are trending upwards and general consumer should continue to grow, despite July’s small dip. Compiled each quarter using a wealth of industry-leading expertise, the Headlights report offers a wealth of in-depth insight and analysis on the latest used car trends and must-know sales figures. So, to help your dealership navigate the current used car market and prepare for the rest of 2023, we’ve pulled together six of the most essential statistics from this quarter’s Headlights report to help power your business to success. For even more in-depth market insight, view the full heycar Q2 2023 Headlights report 1. 4% increase in used EV prices As we’ve covered, used electric vehicles experienced a slump in value from Q3 of 2022. High energy prices were mainly to blame, but no government-backed incentives for used buyers (Scotland aside), low consumer confidence and comparatively high prices (compared to petrol and diesel alternatives) all played their part. However, month-on-month average values jumped by 2% to £29,947 in May, and by another 2% to £30,557 in June, leaving them 4% up on April’s figure of £29,363. While not conclusive, this could point towards greener pastures for long-term used EV values. Falling energy prices for the first time in 20 months likely prompted the change. In fact, prices started to fall exactly two months before the reduction in the energy price cap – the maximum amount energy suppliers can charge customers per kilowatt hour – from £3280 in April to £2074 in July. 2. 67% increase in EV leads Complimenting the rise in values was a significant jump in leads for used EVs across heycar: 67% hike in January to June. However, battery electric power still ranks lowest by leads on the site, accounting for just 4.4% of leads in June and 3.3% in quarters one and two. While greater leads do not directly translate to an increase in sales or prices, they demonstrate that used buyers are showing more interest in second-hand EVs as the year has progresses. 3. Diesel on top with 32.4% share of leads For the first six months of the year, petrol had the largest slice of used leads (34.9%) by fuel type, with diesel occupying 32.4% of the pie during the same period. But in June, diesels became the dominant fuel type by leads with a 32.4% share next to petrol’s 31.9% – the first time this has happened in 2023. As the cost of living crisis continues to squeeze consumers, this could represent a longing for better fuel economy among commuters. Dealerships, take note… 4. Convertibles, coupés see biggest value hike Perhaps unsurprisingly for the summer months, convertibles experienced the biggest proportionate increase in values of any body style in quarter two. They rose by 7.1% from £28,941 in April to £30,993 in June. Coupés experienced the second largest average increase, jumping 2.5% from £34,985 to £35,854. Estates were third, rising by 1.1% from £24,300 to £24,578. MPVs, SUVs, hatchbacks and saloons had consistent pricing across the first two quarters, with the largest change being just 0.6%. 5. Consumer borrowing down in Q2 2023 Rising costs and interest rates meant consumers cut their cloth in Q2 2023, with the latest Bank of England figures reporting that net borrowing of consumer credit by individuals decreased from £1.5bn in April to £1.1bn in May. The Bank of England also added that consumers withdrew £4.6bn in May, compared to £3.7bn in April – the highest level of household withdrawals on record since the index began in 1997. This is bad news for dealerships because it puts consumer debt in direct competition with funds traditionally used for high-value purchases. Soaring mortgage rates – hitting a 15-year high in July – squeezed buyers even further. However, this does open opportunities for savvy dealerships: interest rate rises benefit consumers not at the mercy of mortgage increases, meaning older buyers with savings, share holdings or pensions who are keener on car ownership (over finance) are seeing an improvement in their spending power. With that in mind, investing in stock more applicable to older customers could be an intelligent call. 6. Consumer confidence on the up As all dealerships will know, consumer confidence is key to success. Thankfully, after months (if not years) of turmoil, consumer confidence is back on the up. The GfK’s Consumer Confidence Index claims that data taken before July 2023 shows that buyers are more optimistic than at any point in the previous year. Its score of -27 was up from -30 in April, -45 in January and -40 in May 2022. The July data did show a small decline, but the firm points to a strong five-point jump to -8 uptick in how people view their personal finances in the next 12 months. In short, the future is looking bright for the used car market. For even more in-depth market insight, view the full heycar Q2 2023 Headlights report