The used car market grew 4.1% for the first quarter of 2023, delivering its best start to a year since 2020.

It’s the best start to a year since 2020, but the market remains below pre-pandemic levels

New figures from the Society of Motor Manufacturers and Traders (SMMT) show a total of 1,847,149 transactions took place in the first three months of the year.

That equates to 72,798 extra cars compared with the same period in 2022, as growth in the new car market improved availability.

Demand was seen across the whole of Q1, with rises of 3.6% in January, 4.4% in February and 4.3% in March.

But Q1 transactions remain 8.6% below pre-pandemic levels, showing the ongoing impact of supply challenges and consumer sentiment in light of the economic backdrop.

Demand for battery electric vehicles (BEVs) soared and sales were up 56.6% as 26,257 changed hands, representing 1.4% of the market – up from 0.9% last year. Sales of plug-in hybrids (PHEVs) also grew, up 13.9% to 16,006 units. As a result, plug-ins accounted for 2.3% of sales, up from 1.7% last year, boosted by increasing numbers of vehicles entering the second-hand market. Hybrids (HEVs) rose too, by 38.2% to 49,182 units.

But conventional powertrains remained dominant, with petrol transactions rising 4.5% to 1,048,015 units and diesel sales up marginally by 0.2% to 706,282 units. Combined, ICE cars accounted for 95.0% (1,754,297 units) of the market, a fall of 1.2 percentage points on last year.

Mike Hawes, SMMT chief executive, said the easing shortages of new cars were “unlocking availability” in the used market and helping to deliver more electric vehicles to second and third owners. But he warned that the infrastructure rollout must also improve – and at speed – with “affordable and reliable charging essential if more used buyers are to switch to the latest and cleanest available vehicles”.

Ian Plummer, Auto Trader’s commercial director, also said more needs to be done to give people the confidence to get behind the wheel of a used EV. The automotive marketplace has recently published its Road to 2030 Report, calling for further incentives to bolster new and used EV demand.

“It should help considerably, if, as we hope, the Government adopts battery health monitors in all vehicles, in addition to considering our wider support measures of reducing VAT on used electric vehicles and cutting it from public chargers altogether,” said Plummer.

Superminis and black cars remain dominant

The SMMT Q1 figures also reveal that superminis remained the most popular vehicle type at almost 600,000 transactions, up 3.3% and taking market share of 32.3%. They were followed by lower medium, at 26.5% of the market, and dual purpose, with a 15.5% share – after recording the largest volume growth, at 15.1%. The three segments accounted for almost three-quarters of all cars sold (74.3%). At the other end of the scale, luxury saloons recorded the steepest fall, at 7.3%.

Black was once again the most popular used car colour, equating to more than a fifth (21.4%) of sales. Grey, last year’s most popular colour for new cars, took second place, knocking blue back into third. Silver/aluminium as well as green and beige were the only colours to decline in the top 10 ranking fourth, seventh and 10th and falling by 1.8%, 2.3% and 0.7% respectively.