Used-car prices accelerated at a faster pace than expectations in the three months to the end of September, new figures claim.
A surge in demand for second-hand cars over the summer drove prices up by 3 per cent a month, trumping predictions that inflation was easing, according to a report published on Tuesday.
Within that, prices for cars valued at up to €6,000 rose 6.4 per cent during the three-month period, bringing year-on-year inflation for these models to 34.5 per cent.
Higher-valued cars, worth up to €19,250, increased their prices by 3.3 per cent, bringing the year-on-year rise to 17.2 per cent.
According to the DoneDeal Car Price Index for the third quarter of this year, published on Tuesday, a 2017 Audi A4 cost €26,324 at the end of September, while it would have been expected to cost €19,810.
Dr Tom Gillespie, environmental economist at University of Galway, noted that a fall in demand eased used-car price inflation to 3.1 per cent in the second quarter of this year, from 7.4 per cent in the opening three months of 2022.
He explained that this indicated that prices may have peaked. “However, this doesn’t seem to be the case as the quarterly price inflation for quarter three stands at 3.5 per cent, a slight increase on quarter two,” Dr Gillespie pointed out.
The economist says that demand for used cars jumped 5.8 per cent between July and September, forcing up prices just at the point where observers believed that they had peaked.
There was also a “slight recovery” in used car stocks over the past two months, Dr Gillespie’s analysis of the figures shows.
The report has bad news for the Government’s climate change plan, which aims to have about a million electric vehicles on the Republic’s roads by 2030.
Electric cars accounted for one in six new vehicles registered here in the third quarter of this year, against 9.5 per cent during the same period in 2021.
Nevertheless, DoneDeal’s report predicts that despite the rise in new electric vehicle sales, the Republic is unlikely to hit its 2030 target without a significant increase in the number of used models on the market.
So far, electric vehicles account for less than 1 per cent of the used-car market, and the report says there is little sign of this increasing.
Tight supply combined with high demand to add 8.3 per cent to the price of a used electric car in the third quarter, says the report.
