The rising cost of living is starting to impact on the used car market, but the sector remains in a very strong position.

Indicata says the used market “remains very healthy” but the rising cost of living is starting to hit consumer demand.

Used car prices fell marginally by 0.3% in October and are down 4.0% year-to-date, with the UK remaining the only country in Europe to experience a fall, according to Indicata.

But its latest Market Watch insights report reveals overall prices are still 24.8% higher than at the start of 2021.

Sales fell 8.3% to the end of October, but the decline means stock levels have increased by 5.9% compared with 12 months ago – much-welcome news in a market devoid of used cars for over two years.

“It’s ironic that a fall in both sales and prices has been relatively healthy for dealers,” commented Jon Mitchell, Indicata UK’s group sales director.

“The used market remains very healthy but the continuous rise in the cost of living has taken the sting out of consumer demand. This trend seems to have set the tone for the industry into early 2023.”

Used car prices will likely remain stable for the coming months due the ongoing restricted new car supplies and the resultant major stock shortages in the used market, Mitchell added.

The speed of sale for used electric vehicles has also been hit by the rising cost of living, due to their increased ticket price. Used petrols are now selling twice as quickly as EVs but during August it was the other way round.

But EV sales continue to increase, albeit from a small base and with longer sales times, supported by ongoing driver education from the industry.

“Used EV sales haven’t ground to a halt but are taking twice as long to sell. Many of our dealer customers are stocking both used hybrids and EVs in preparation for when the market moves towards low- or zero-emission motoring,” summed up Mitchell.