Prices for second-hand cars were up 67% in September this year compared with March 2020, according to new analysis by second-hand sales website DoneDeal.
The study has found that the annual rate of used car inflation sits at 21%.
The increases reflect turmoil in the market since Covid-19, difficulty in accessing second-hand cars and rising demand.
The analysis, based on listings on DoneDeal, also show the rate of price inflation for lower-cost cars was higher than for more valuable vehicles.
According to the report, the quarterly rate of inflation for cars under €6,000 in value was 6.4% compared to 3.3% for cars over €20,000.
In 2022, used car prices increased 7.4% from January to March.
The pace of increase then fell to 3.1%, only to rise again to 3.5% in the third quarter. In contrast, the rate of inflation in 2018 and 2019 averaged just 0.8%.
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The poor availability of used cars was exacerbated by demand growth from June to December last year. Demand fell from March to July this year, but then jumped 5.8% from July to September.
The study also found that when it comes cars at the lower end of the market, the higher prices obtainable means emissions targets are not a deterrence on less environmentally sustainable used models being imported.
However, it also points out that CO2 emissions for the total amount of new and used car imports in the first half of 2022 were 17.3% lower compared with imported cars in the first half of last year.
Part of the reason for this is the number of new electric vehicles and hybrid vehicles on the roads.
Sales of new electric vehicles have risen steeply, but not yet led to many EVs going into the second-hand market, with EVs accounting for 1% of second hand sales.
Speaking on Morning Ireland, Dr Tom Gillespie, Environmental Economist and Author of DoneDeal's Motor Report explained why prices have shot up since the onset of the pandemic.
"During the pandemic there was a shortage of microchips, a decrease in supply of new cars but also we had the impact of Brexit. We would usually get a huge proportion of our cars entering the market from the UK, but after Brexit that almost halved," he said.
"We had a big choke in supply, and strong demand for cars during the pandemic, and we also saw peoples' saving increase," he added.
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Mr Gillespie said that inflation was outweighing the depreciation of cars, which meant cars were going up in value.
He gave an example of the price change in an Audi A4.
"If you take a 2013 Audi A4 - last year in September 2021 that would have been an average price of around € 11,200, and if there was normal inflation you would expect that car today to depreciate and be around € 9,800 - but instead it has gone up and that car would now be worth around €12,400 so that is an increase of 11%," he explained.
When it comes to electric vehicles, Mr Gillespie said prices in the secondhand market continue to rise due to strong demand and low supply.
"We saw a quarterly inflation rate of 8.3% for used EVs in the last quarter - that is the highest it has ever been in the used EV market in Ireland," he said.
Additional reporting by Gill Stedman
