The average price of used cars has seen continued growth each week since May and this growth is accelerating as the average price of a used car listed on Auto Trader was £15,025 in the week of 6 July.
In the week commencing on 6 July, the average price of a used car increased by 4.4% year-on-year (on a like-for-like basis) and ‘it’s a positive picture across segments, ages and fuel types’. The average price of a petrol car grew by 5.4% in the week commencing on 6 July (year-on-year), having seen sustained growth for 19 weeks. For the same time period, the average price of diesel cars grew 4.1%.
Alternatively fuelled vehicles (AFVs), of which there are much lower volumes compared with traditional combustion engines, have seen more nuanced price movements. Electric vehicle prices rose by 2.7% while prices of hybrid vehicles depressed by -1.6%. Although pricing trends for AFVs are not as good as their ICE counterparts, demand and searches for these fuel types have strengthen meaning prices will continue to improve week-on-week.
Volume brands are seeing particularly strong growth, increasing by 8.2% year-on-year, while premium brands are growing in price by 2.2%. The average prices of vehicles up to 15 years old also increased, with particularly pronounced rises in older categories; those aged between 10-15 years grew by 6.6% in the four weeks up to 13 July, compared to the same period last year. Meanwhile, prices for five to 10-year-old cars grew by 4.9% and for cars aged three to five years the growth was 4.2%, according to Auto Trader.
The same positive trends can also be seen when comparing price evolution by body type. In the four weeks to 13 July, the average price of a hatchback increased by 8.3%, 3.5% for saloons and 1.7% for SUVs, when compared to the same time frame last year. Convertibles prices are strengthening week-on-week, however average prices are depressed year-on-year by -1.1%; this is because prices for this segment were very strong last year thanks to the hotter weather in the UK.
Richard Walker, Auto Trader’s director of data and insights, comments on the findings: “It’s not just that prices are up right now; ever since retailers have been able to restart their sales, used car prices have seen sustained growth for more than 10 weeks and it’s clear this growth is accelerating. It’s imperative to consider all market factors when evaluating price. Price is driven by supply and consumer-driven demand, and although supply has been constrained with auction houses being slower to reopen since lockdown, they are returning to over 90% of pre-COVID-19 levels. Thanks to our massive audience share of car buyers and 64 million cross platform visits in June, we have a robust picture of consumer demand which outweighs supply greatly and there’s no signs of this slowing. Consumer confidence seems relatively robust too, with 82% saying they are ‘as confident’ or ‘more confident’ in being able to afford their next car than they were a year ago”.