Auto Trader’s Retail Price Index recorded a 3.7% year-on-year increase in June 2020 (on a like-for-like basis) which was the largest monthly growth in used car prices since January 2019. The Index is based on observed pricing data from circa 900,000 vehicles every month, this took the average price of a used car in June to £13,949.
June, the first full month of trading post lockdown for retailers in England, marked the third consecutive month of used car price growth, following the 0.1% and 1.9% recorded in April and May respectively, Auto trader data showed.
There were ‘interesting trends’ in price driven by the age of the vehicle, with older cars seeing bigger increases. In June, the average retail price of a car aged over 10 years increased 6.7% over the previous year, and those aged five to 10 years increased 7.0% year-on-year. Newer cars aged below five years recorded a more conservative growth of 3% year on year.
During the lockdown period the number of retailers making price changes and the value of price adjustments was significantly lower than normal trading conditions. Whilst this has increased following the reopening of showrooms last month, the levels are still well below ‘normal’, pointing to the level of retailer confidence in market pricing.
Pre-COVID-19, the number of retailers making daily price changes to their stock averaged between 2,500 and 3,000. Last week[1] a daily average of 1,816 retailers made price changes, which is 33% lower than the same period last year. In normal trading conditions, retailers adjusting their stock average between £250 - £550 per day. Further demonstrating the degree of confidence in the market, the average amount of each reduction last week was £256, so at the lower end of ‘normal’. Among those adjusting prices, 27% are increasing them.
Petrol prices rocket as low emission counterparts continue decline
The impact of supply and demand dynamics in the market are evident in the price movement of internal combustion engines (ICE) and their low emission counterparts. At £14,789 diesel prices have increased 2.7% year-on-year following on from the 0.9% increase recorded in May. This is the highest level of growth since February 2019. However, it pales in comparison with the rate of growth in used petrol prices, which are up 5.3% year-on-year. At £12,697, it marks seven months of continued price growth and the highest increase recorded since October 2018. This is the result of high demand versus low supply in the market.
[1] 21st – 28th June 2020
