The latest Auto Trader Retail Price Index, which is based on daily pricing analysis of circa 900,000 vehicles, reveals a strong start to the year for the used car market as average prices reached another record in January. With an average sticker price of £18,067, it not only marks the 22nd consecutive month of price growth, but a remarkable 31.3% year-on-year (YoY) increase on a like-for-like basis. This massive price growth continues to be fuelled by the unusually large gap between the levels of supply and demand in the market.
One in five ‘nearly new’ cars priced above brand new equivalents
Highlighting just how strong the used car market is, more than one in five (21%) of the nearly new cars currently available (those aged up to 12 months) are more expensive than their brand-new equivalents. Nearly half (46%) are priced within 5% of the RRP. The reason for this previously unheard-of phenomenon, is down to the same dynamics affecting the wider used car market i.e. very high demand – in this case from car buyers unable or unwilling to wait for a brand-new car to become available – coupled with very low supply. Despite this, nearly new cars were leaving forecourts 24% faster in January 2022, than they were in January 2021 (an average of 41 days vs 54).
Commenting on January’s performance, Richard Walker, Auto Trader’s Director of Data and Insights, said: “The January blues have done little to take the heat out of the used car market, which has started the year in a very strong position. The ongoing squeeze on new and used car supply, combined with exceptionally strong consumer demand has ensured that the record price growth we saw last year has continued into 2022. From what we’re tracking there’s little evidence to suggest that these very unusual market dynamics will change significantly any time soon. Simple economics therefore point to a continuation of strong price growth well into the year ahead.”
Looking at January’s price growth on a more granular basis, volume brands are currently recording the largest year-on-year price increases on vehicles aged below five years old. Prices across all brands rose by least 11% (Aston Martin) last month, but at the top end of the scale, volume brands including Ford (42%), Skoda (41%) and Suzuki (39%) saw almost four times that level of growth.
The current supply dynamics have resulted in exceptional YoY price growth for both petrol and diesel vehicles, with the former up 32.7% (£16,841) and the latter up 31.4% (£17,876). Demand for petrol increased by a significant 9.7% YoY, whilst supply decreased by -5.1%. Demand for diesel was flat (0%) YoY, but supply dropped by a massive -14.2% in January.
Meanwhile, prices for both volume and premium electric vehicles (EVs) saw large month-on-month (MoM) increases. Last month, volume brand EVs increased by 32.2% YoY (£26,502), up from 30.4% growth in December, whilst premium brand EVs continued to catch up the pace, growing at a rate of 17.8% (£50,528), up from 15% the prior month. YoY demand saw upward MoM movements for both, albeit only just for premium. Demand for volume EV brands increased a whopping 80.2% YoY (up from 60.4% YoY in December) and a more than respectable 44.2% YoY for premium EV brands (up from 44% YoY).
Sue Robinson, Chief Executive, NFDA commented: “Used car prices remain high as a result of supply constraints adversely affecting the global market. Nevertheless, dealers are optimistic, reinforced by consumers’ growing appetite for Electric Vehicles. Despite challenges, most notably relating to supply, consumer confidence remains robust for the year ahead.”
Top 10 price growth (all fuel types) | January 2022 vs January 2021 like-for-like
Jan-22 Average Asking Price
Price Change (YoY)
Top 10 price contraction (all fuel types) | January 2022 vs January 2021 like-for-like
Jan-22 Average Asking Price
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