Demand for used cars is slowing down but the industry’s stock shortage is so acute that prices will remain at their current level for years to come.  

Alex Wright, SVA’s managing director, says there’s been a wholesale used car shortage of over two million units since Q1 2020.

The prediction comes from Shoreham Vehicle Auction’s (SVA) managing director Alex Wright who says that the wholesale market is short of over two million used cars.  

Elaborating on this, he explains that the increased cost of living and rising inflation have both impacted retail used car demand during 2022, affecting the wholesale market with falling prices and reduced sales.  

But with 1.72m fewer new cars being sold between January 2020 and May 2022, the used car market is short of a corresponding number. Alongside this, dealers are also retaining a greater percentage of their part exchanges against their new car sales.  

And this means there’s been a wholesale used car shortage of over two million units since Q1 2020.  

Wright added that this puts into perspective how the sector has been badly affected by new car shortages created by the global semiconductor crisis. 

“The market is so short of stock that even if demand remains depressed for a prolonged period prices will remain strong. We do not predict a price crash like we’ve seen in previous years as each month the supply shortage is getting worse,” he continued. 

“We believe prices will stay at their new normal for another two to three years while the hole in the used car supply is slowly filled,” Wright emphasised.