The average price of a used car was £17,173 in July, which on a like-for-like basis, is a 19.5 per cent increase on the same period last year, Auto Trader Retail Price Index data shows.
Against the all-time high of 32.2 per cent, recorded in April 2022, last month’s rate of growth appears relatively conservative.
However, whilst some commentators have been predicting an imminent price crash for several months now, Auto Trader’s data, which is the largest and most accurate view of the market, reveals used car prices remain stable.
On a month-on-month (MoM) basis, average prices have increased (0.2 per cent), which contrasts with typical seasonal trends (July 2019 recorded a 0.4 per cent decline) and undermines any suggestion prices are about to drop.
The current softening in the rate of growth is due, in part, to the fact growth is now overlapping last year’s already very high levels – in July 21, prices were up at a then all-time high of 14.1 per cent year-on-year (YoY).
By applying a longer-term view, it’s clearer to see the full extent of the recent growth and just how strong prices remain; last month the average price of a used car was up over £3,300 when compared with July 2020, and a whopping £4,100 when compared with July 2019.
According to the latest onsite data from Auto Trader, the volume of advert views on its marketplace dipped by 5.7 per cent YoY, but against the more ‘normal’ trading conditions of 2019, they’re up 12.4 per cent.
Despite economic uncertainty around the rising cost of living, surging fuel prices, and the Bank of England’s expected hike in interest rates to curb rocketing inflation, Auto Trader research offers a more stable outlook for the used car market.
Circa 80 per cent of consumers visiting the Auto Trader marketplace who were surveyed in July were at least as confident as they were last year in their ability to afford their next car – 43 per cent said they were more confident, which is up on the 41 per cent recorded in June, and the 38 per cent in May.
What’s more, in a separate survey of Auto Trader visitors, three quarters stated they were intending to buy a car within the next six months, which is consistent with the levels over the last year, whilst two in five (40 per cent) are planning on making a purchase in the next two weeks.
Richard Walker, Auto Trader’s director of data and insights, said: “With price growth softening it would be easy to misinterpret the data as a market in reverse or in decline, particularly against the current backdrop of economic uncertainty.
“But our data, which is based on the largest and most accurate view of the automotive market, shows that is simply not the case.
“And whilst demand is easing against last year’s once in a lifetime levels, with almost four million new and used car transactions ‘lost’ since 2020, combined with packed new car order books – and very lengthy waiting times – demand for used cars remains.
“Coupled with ongoing supply challenges, anyone predicting a crash in used car prices any time soon, will be sorely disappointed.”