Used car prices have risen 56 per cent on average over the last two years, according to a report by online marketplace Donedeal.
Analysis of used car prices on its site found prices rose by an average of 7.7 per cent over the last three months of 2021, hitting what it claims are record levels of price growth.
The report’s author, Dr Tom Gillespie, an environmental economist at NUIG, said: “The supply chain disruption caused by the pandemic and the realisation of Brexit market consequences resulted in a perfect storm for used car price inflation.
“The big global story in 2021 in the motor industry was the persistent under-supply of semiconductors, a crucial component in new cars. Longer waiting times for new cars incentivised consumers to turn to the used car market, which offered little in the way of relief as supply of used cars was also under strain.”
He said the onset of Brexit had disrupted the usual flow of used cars from the UK. “In 2019, just before the onset of the pandemic and Brexit, we imported 108,000 cars from the UK, in 2020 74,900, and in 2021 the total number of used car imports from the UK was just 47,034.”
The report forecasts that the elements contributing to car price inflation are showing few signs of easing in the short term. For buyers looking to trade in their old cars, it means they have stronger bargaining chips as car dealers struggle to maintain their inventory, according to Dr Gillespie.
Meanwhile, initial registration figures for the first 10 days of this year show hybrids are now the most popular new cars on the Irish market.
Sales of regular hybrids account for 30 per cent of the new car market, with plug-in hybrids making up another 9.8 per cent. This compares to 27.9 per cent for petrol and just 20 per cent for diesel engine cars.
Sales of fully electric cars make up 11 per cent of the new cars registered so far in 2022.
It reflects a dramatic change in the Irish market, which was previously dominated by diesel. In 2017, for example, diesel accounted for 65 per cent of new car sales, petrol for 30 per cent and hybrids made up just 3.4 per cent.
Overall, the new car market this year is down 18.6 per cent with 7,892 registrations compared to 9,700 in the same 10-day period last year. Some of this drop has been attributed to delays in the delivery of new cars due to the global chip shortages impacting vehicle productions lines.