The average value of a second-hand car has increased by some 16 per cent in the last year according to new data released by Cartell.ie.
Using a sample of 5,000 cars, the report looked at values in November 2020 and, running the sampled cars through the Cartell Price Guide checker, found that 2021 prices had, on average, increased by 15.87 per cent - despite the fact that those same cars were one year older.
Looking at some of the data for individual models, Volkswagen values remained notably strong with prices for a 161 and 142 diesel-powered Volkswagen Passat rising by 15.4 per cent and 19 per cent, respectively. The €14,000 average 2020 value for a 162 diesel Volkswagen Golf rose in the space of the year by €2,700 to €16,700 or, in other words, by 19.2 per cent.
Toyotas held their value well too with a 161 Toyota Auris diesel in average condition now worth €14,500, up 8 per cent on last year; the value of a 142 diesel Avensis was up by 10.7 per cent to €10,900.
The figures remained relatively constant even in the lower end of the market. In 2020, buyers could have bought an average 2011 Ford Focus for around €3,950; the same model today is valued at €5,350. Older still, a 2005 Skoda Octavia diesel, previously valued at just €500, is now worth €1,050, a massive 110 per cent increase. A 2003 petrol-powered Volkswagen Polo, priced last year at €750, is now valued at €1,100.
According to Jeff Aherne, Cartell's Innovation Lead:
"These results show us that a perfect storm has taken place in the market: a combination of Brexit, microchip shortages, WLTP and supply-side availability have led to an unprecedented rise in used vehicle values."
"Since Cartell.ie was set up in 2006 and started monitoring the used vehicle market," he said, "we have not seen anything like this before. Lead-in times for delivery of new vehicles have extended, principally due to the microchip shortage and, until supply ramps up again, we don't see this situation improving in the near-term. Those who benefit most are the owners of used vehicles, which have seen a spike in values, who are looking, and can afford to wait, for a new vehicle."
There are, as Aherne suggested, a number of factors at play in driving up demand and, thus, values for new cars in Ireland.
Used car values in the UK have also increased by around 15 per cent, partially due to more people having abandoned public transport in the wake of the pandemic in favour of cheap second-hand cars, thereby increasing demand.
Demand in the UK has also been driven up by the dearth of new cars available for immediate delivery with figures from Auto Trader showing that 46 per cent of new car buyers would be unwilling to wait more than a month for delivery of their preferred vehicle; 74 per cent indicated that they would be open to buying a used alternative if a brand-new car were not readily available.
While the same factors are at play in Ireland, the supply of quality used cars coming here from the UK has also dramatically declined due to VAT and VRT changes in the wake of Brexit, as well as the low supply of used cars on the UK's own second-hand market.
In 2019, Ireland imported 108,083 cars from the UK; so far in 2021 that figure stands at around 40,200. While imports from that other big right-hand-drive market, Japan, are up by 65 per cent compared to 2019, a figure of 6,068 cars is still a drop in the ocean, relatively speaking.
Recent figures, also from Cartell.ie, show that the average age of a car on Irish roads is now 8.7 years, meaning that the natural supply of used cars created by buyers acquiring newer models has also diminished, probably as a result of the aforementioned factors.
Whilst this might seem like good news to those planning on holding onto their cars for a little longer, for those in the market for a cheap used car, it most certainly is not.