SMMT: Used car market up as EV sales almost double

The car industry is calling for VAT to be cut on new electric vehicles so future supply can grow to meet second hand demand.

The UK’s used car market grew by 5.1% to 7,242,692 transactions in 2023, according to the latest figures published by the Society of Motor Manufacturers and Traders (SMMT).

Four straight quarters of growth saw 351,915 more motorists get behind the wheel of a second hand car than in 2022 as the previous year’s supply constraints receded, delivering more choice to buyers.

Across the year, sales of used battery electric cars (BEV) almost doubled, rising 90.9% to a record 118,973 units and a 1.6% share of the overall market, up from 0.9% in 2022. The uplift is in line with growth in the new car sector and demonstrates keen demand for zero emission motoring in this naturally more affordable price bracket.

Sales of hybrid electric and plug-in hybrid electric cars were also strong, up by 40.0% and 25.1% respectively and, collectively, electrified vehicles represented 5.6% of the market – up from 4.0% in 2022. Diesel and petrol, however, remained the most dominant fuel types, with a total of 6,827,466 units changing hands – 94.3% of the overall market.

Superminis once again proved the most popular used car body type, accounting for one in three (32.1%) sales in the year. They were followed closely by cars in the lower medium segment, which took 26.6% of the market, and dual purpose vehicles (15.2%). The smallest volume segment was luxury saloons, representing just 0.5% of transactions.

Bucking the grey trend in the new market, black cars were the most popular used purchases, with more than 1.5 million buyers (21.4%) choosing the colour. Grey, however, increased its ranking, displacing blue to take second place. At the niche end of the spectrum, 4,870 buyers opted for pink, while 4,686 cream cars found new owners, and maroon represented 4,585 transactions.

Mike Hawes, SMMT chief executive, said: “A healthy new car market is key to driving choice in the used sector and it’s great to see record numbers of second and third owners benefitting from the growing availability of electric vehicles. The demand is there, but to sustain it we must enable every motorist to make the switch. The upcoming Budget is a prime opportunity for government to do just that – halving VAT on new EVs, while making public charging as easy and affordable as plugging in at home, would ensure a faster and fairer transition for all, giving the UK a green economic boost.” 

Commenting on the 2023 used car transaction data, Auto Trader’s commercial director, Ian Plummer, said: “Against an uncertain economic and political backdrop last year, the used car market again showed its resilience, with overall demand remaining exceptionally robust, reflected in the 110 million additional visits to Auto Trader.

“There’s no doubt the months ahead will have their challenges, not least the ongoing squeeze in supply, but the used car market has started the new year with some real momentum behind it, with visits to our marketplace reaching an all-time high in January. With car buyer sentiment and confidence remaining positive, I fully expect 2024 to be another robust year for demand and transactions.

“The maturing used electric market may still be in its infancy, but last year saw a definite growth spurt. Significantly softened prices, greater availability and more choice has proven a compelling combination for car buyers; demand on our marketplace surged 50% on 2022, the share of enquiries almost doubled, and used EVs sold five days faster than any other fuel type. With many second-hand models now at price parity with their traditionally fuelled counterparts, along with lower running costs, the switch to electric has never been a more attractive prospect.

“The used EV market will play a vital role in driving mass adoption of electric cars, but the government must do more to encourage car buyers to switch; building battery confidence, providing fairer charging costs, and introducing more financial incentives, including removing VAT on new and used EVs, will be essential.”