Asking prices for used cars rose 4.6% during the first three months of this year driven by a resurgence in demand from buyers and sluggish supply, according to the latest report from listings website DoneDeal.
It means the annual rate of inflation in the second-hand car market is now running at 13.2%, just under half the level it was in the first quarter of last year.
The continued price growth trend leaves prices 77.5% higher when compared to the start of the pandemic in March of 2020.
The analysis found that demand continued to be strong over the first portion of the year, growing by 21% in January and 15.5% in February.
Despite this, the supply of vehicles remained tight, rising by just 5.3%, less than the rate of demand.
This had the effect of propelling the prices being sought higher, report author Dr Tom Gillespie said.
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"The increase in prices was observed in both ends of the market, with the difference in inflation in the lower and upper ends of the market being quite similar; 6.1% and 5.1%, respectively," he explained.
Imports increased by 6.4% compared to the same quarter in 2022, the first annual increase since 2019, with the proportion coming from the UK hitting a new low of 32.7%.
This compares to 93.6% coming from the UK in the first quarter of 2020, while overall imports remain 53.5% below the first three months of 2019.
Between January and March the number of ads on DoneDeal for used electric vehicles was almost triple the number during any three month period last year.
According to Mr Gillespie, this growth in used EV supply had a stabilising effect on prices, causing them to fall 0.7% over the quarter.
"The steady transition of new EVs into the used car market is an encouraging sign from an environmental policy perspective, as an increase in supply should make EVs more affordable and encourage people to transition," said Mr Gillespie.
"It is hoped that the charging infrastructure development will keep in line with the increased number of EVs on the road, especially in rural Ireland, where car emissions per person are highest."
The supply of used EVs should be bolstered in the future by the growth in sales of new electric and hybrid cars, which now account for 44.6% of sales according to the Society of the Irish Motor Industry.
In the first quarter, 9,303 new EVs were registered here, representing an almost 50% increase compared to the same period last year.
Speaking on RTÉ's Morning Ireland, Dr Gillespie said the production of new cars is starting to pick up and at the end of last year it looked like things were normalising but there was a big rise in demand at the start of this year.
"The production of new cars is starting to catch up, the microchip shortage is starting to become a thing of the past and imports are up on last year, but they're still about 50% less than they were at the at the start of 2019 or start of 2020".
He said this is just because of Brexit.
"To put it into context, 93% of the cars that we would have imported in 2020 or 2019 would have come from the UK and the share of cars coming in from the UK now is down to 32%," he explained.
But he added that there is a big increase of cars coming from overseas from Japan and Australia.
He said that this is really affecting the lower end of the market the most.
"We can't replenish the old stock of cars, the Celtic tiger cars that are that are becoming obsolete now and we weren't producing as many 2010, 2011, 2012 cars back then.
"And this is the kind of lower end of the market where people on lower incomes, need a car at that price. Because we can't get cars in from the UK, these are becoming rarer and rarer on roads," he said.
On the sales of electric vehicles, they and hybrids now account for 44.6% of new cars registered, an increase from only 6.2% in 2018 and 18% in 2020.
"New EVs are starting to become very popular in the last two or three years, and that's starting to finally translate into the used car market. In the last quarter, the number of EVs on DoneDeal tripled to around 1,500 compared to any quarter last year", he said.
