Derry Journal Motoring with Jim McCauley: Auto Trader Predictions for 2024

This year also sees the introduction of the strict ZEV Mandate in the UK which is a legal requirement for car manufacturers to meet targets for new EV sales. This requires that 22% of cars sold by each manufacturer must be fully electric or face a fine of £15,000 for every non-compliant vehicle sold. However, the current average share of EV sales across brands is approximately 16%, and for some, it’s as low as 3%. The recent reduction in demand for all-electric vehicles now accounts for only 1 in 10 of all retail sales, which further underlines the need for more offers to stimulate market demand.

Despite the economic strain on consumers, Auto Trader predicts used car demand will continue in 2024 and result in a small market uplift. It forecasts transactions will increase to an estimated 7.24 million sales across the UK, up slightly from the 7.17 forecast for 2023.

Current stock levels on Auto Trader in December were up just 2% on December 2022, and with significant variations across different market segments. The volume of cars aged up to a year old had increased 32.2% over the same period although down nearly 50% on 2019’s levels, while those aged 1-3 and 3-5 years old had fallen -10.5% and -7.3% respectively.

Although supply is slowly returning, it’s being outpaced by consumer demand, which according to Auto Trader’s data, was currently up 10.7% on December 2022. The strong market health is reflected in both the speed in which used cars are selling, taking 32 days on average and the increase in used transactions, which were up around 5%.

This is seen as helping to stabilise the recent softening in used car retail prices, which at the December mid-month point (£17,304) are down -3.9% on a YoY and like-for-like basis. Traditionally, as more buyers come into the market after the festive lull, retail prices pick back up at the beginning of the New Year, making it important for potential purchasers to compare prices and shop around.

Despite the underlying health of the market, there’s been a recent increase in unnecessary re-pricing activity, likely the result of wholesale trends. In fact, there are currently more than 47,000 used cars being advertised by around 8,000 retailers on Auto Trader that are priced under their true market value, equating to over £32.7 million in missed profits or over £4,000 per retailer.

To get New Year sales off to a good start, manufacturers are already tempting buyers with up front incentives. Tesla, for example is offering 0% APR on 2023 Model 3 saloons and Kia is kick starting the year with 2.9 per cent APR and no minimum deposit on its EV6, Niro EV and Soul EV models.