The used car year 2021

The ongoing coronavirus pandemic and the chip shortage hit used car dealers hard in 2021. However, the slump is not as severe as many expected.

‍The year 2021 in figures - from the perspective of a car dealer

According to the latest figures from the German Federal Motor Transport Authority, the number of new owner registrations in Germany fell from 7.0 million in the previous year to 6.7 million. Accordingly, the German used car market recorded losses of 4.5%. At the same time, there were hardly any changes in the market shares of the largest car manufacturers in Germany last year. German used car buyers remained loyal to their brand last year, meaning that there were no changes in positions 1 to 6. By a wide margin and despite a decline of around 5%, Volkswagen remains the most popular car brand in Germany with 1.4 million new registrations. With 679 thousand used cars traded in 2021, Mercedes also recorded a decline of 6.5% compared to the previous year, but remains the first runner-up to Volkswagen. Opel is in third place with 643 thousand new registrations and a drop of 4% compared to 2020, followed by BMW with 573 thousand used vehicles traded and a slight drop of 1.5%. The VW subsidiary Audi ranks 5th with 544 thousand vehicles and is experiencing a significant decline of 7.5% in 2021. Ford closes the top positions with 482 thousand registrations (6.5% less than in 2020). In the race for 2nd to 6th place among the most popular German car brands, the rivals are therefore very close together.

Falling supply causes prices to rise

The price of the average used car has risen by almost 10% compared to the previous year, according to a report published by the ADAC in December 2021. Consumers had to pay an average of €22,841 for a used car last year. In previous years, the increase in the average price of used cars was considerably lower. This price trend affected all relevant drive types to roughly the same extent, but it was evident that used car prices rose significantly towards the end of the year in particular. This rapid price increase was also evident in a similar form in our neighboring countries. The reasons for this are obvious: due to the coronavirus crisis and the chip shortage, the production of new cars has come to a considerable standstill and delivery times are at a record high. Buyers currently have to wait up to 14 months for delivery of an Audi e-tron. As a result, fewer and fewer used cars are coming onto the market, while consumer demand has remained at a constant level, allowing dealers to turn over their used cars at record speed. This can be seen in the figures for the current downtimes. Compared to January 2021, the downtime of a used car has fallen by 14.6% within a year. The average is 85.8 days.

The electric car is still underrepresented in the used car market

While the electric or hybrid vehicle drive has long since arrived on the new car market, the new drive types are still a rather minor topic in 2021 despite a significant increase in the used car segment. Electric or hybrid vehicles now account for 43% of all new registrations in Germany. There is a clear trend: new registrations for combustion engines have steadily decreased over the course of 2021. Compared to this, the share of new drive types in the used car market is quite low at 5.3%. Around 62.5% of all new registrations last year were petrol cars. The remaining 32.2% were vehicles with diesel engines. Assuming an average holding period of 7 years for new cars, it is to be expected that it will take a few more years for alternative drive systems to find their way onto the used car market.

Forecasts cautiously optimistic

At the end of 2021, the Zentralverband Deutsches Kraftfahrzeuggewerbe (ZDK) predicted a gradual turnaround in the used car market. According to the association, the decline in new registrations of ownership is not expected to continue in the current year; in fact, a slight increase to 6.8 million new registrations of ownership is expected. This is partly due to leasing returns, which are often kept by customers due to the long delivery times for new cars and do not flow into the used car market. The ZDK also expects the supply of used cars to remain low until mid-2022. As soon as supply and demand have balanced out again, consumers can expect used car prices to fall.

CarOnSale on the rise

The used car market is now experiencing a dip for the second year in a row. Despite declining registration figures, demand for digital solutions for the B2B business in Europe is rising steadily. In particular, the changes in warranty law for the sale of used cars to private customers are making the B2B business increasingly interesting for dealers. CarOnSale continued its rapid growth in 2021 and now auctions several hundred vehicles per day.

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