According to the latest data from Auto Trader published today (21 May), the already strong levels of used car price growth has “accelerated significantly” following the reopening of physical forecourts last month.
Based on the circa 440,000 used vehicles currently advertised on the Auto Trader marketplace, the average price of a used car increased 6.8% year-on-year (YoY) on a like-for-like basis last week. It not only marks 53 weeks of consecutive price growth, but a sizable increase on the 5.7% YoY recorded during the week of 12 April, following which growth levels have increased consistently week-on-week (WoW).
This steep trajectory has been fuelled by the increasingly high levels of consumer demand in the market, which has been further propelled by the nationwide reopening of showrooms. On Auto Trader last week, the average number of daily cross platform visits was 2.4 million (reaching 2.6 million by the weekend), which represents a huge 41% increase on the same period in 2019. Underlining just how influential the reopening of forecourts has been, it’s also a further 9% increase on the strong demand we already saw w/c 12th April when showrooms and forecourts were able to reopen for the first time in 2021. What’s more, the average time on site also increased last week, with consumers spending an average of 22.5 million minutes every day on the marketplace, which is up 38% on 2019 and 11% on the week of 12 April.
Pricing behaviour highlights retailer confidence
Looking at the pricing behaviour of retailers last week, the number of those making price changes and the value of their adjustments highlight the current health of the market.
An average of 2,290 retailers made daily price adjustments, which is over 400 fewer than the same period in 2019. What’s more, an average of 12,604 vehicles were repriced every day last week, which is 27% fewer compared to 2019. The data also suggests retailers were making significantly smaller reductions to sticker prices, averaging at just -£24, which is a whopping 93% less than the average adjustment made in 2019 (-£321).
Used diesel, petrol and volume electric record very strong price growth
Looking at the data on a more granular level, the movements in petrol and diesel prices largely mirror the wider market, with both recording very strong rates of growth.
The average price of a used diesel car increased 9.0% YoY last week, which is up on the 8.7% recorded the prior week, and the 8.1% during the week of 12 April. Used petrol prices grew a slightly more conservative 6.3% YoY, however, it marked an even greater WoW and MoM increase than its diesel counterpart, accelerating up from 5.7% and 4.9% respectively. Similarly, the average price of a used volume electric vehicle (EV) grew last week, increasing 2.6% YoY, which is a noticeable increase on the 1.1% recorded four weeks ago. And, whilst there’s healthy levels of demand for premium EVs in the market, it failed to match the very strong levels of supply, which as a result saw prices contract -5.8% last week.
Commenting, Auto Trader’s director of data and insight, Richard Walker, said: “The levels of demand that we’ve been tracking this year have been incredibly strong, but the reopening of physical forecourts last month provided a substantial boost to demand and to used car prices. Such is the strength of the market, we’ve noticed that not only are retailers making significantly smaller price reductions to their stock than normal, but we’ve seen a dramatic acceleration in the number of those actually increasing their prices. And whilst we’re hearing nervousness around the current trade price inflation, I hope our data reassures retailers of both the consumer demand and the profitable margins available when applying a retail back approach to their pricing and sourcing strategy.”