Used car price growth softens year-on-year

Demand is still up by 41.5 per cent on pre-pandemic levels

Used car price growth softens year-on-year

The average price of a used car increased 23.7 per cent on a year-on-year (YoY) and like-for-like basis in June, the latest data from the Auto Trader Retail Price Index (RPI) shows.

Although it’s the 27th month of consecutive YoY price growth, it marks a further softening in the rate of growth, easing from the 28.4 per cent YoY increase recorded in May, and the all-time high of 32.2 per cent in April.

Used car prices remain exceptionally strong, which is highlighted by applying a longer-term view on growth levels: average used car prices have increased £3,300 over the last two years, and £4,500 in the last three.

The current apparent slowdown in YoY rates of price growth is the result of a number of factors, not least the fact that growth is now overlapping last year’s already very strong levels – in June 21, prices were up a then record 11.1 per cent YoY.

Further contributing factors include a slight YoY softening in consumer demand.

Related: June sees weakest new car market for the month since 1996

However, context is key and any comparisons made with 2021 will be heavily distorted due to last year’s exceptional ‘once in a life-time’ levels, which was fuelled by massive pent-up demand post lock-down, and the huge surge in competition for used cars due to new car shortages.

Therefore, it would be more accurate to compare the current market with pre-pandemic levels.

According to the latest onsite data from Auto Trader, demand remains robust – whilst the volume of advert views on its marketplace has dipped a conservative 8 per cent YoY, against the more ‘normal’ trading conditions of 2019, they’re up over 10 per cent.

What’s more, the volume of used car enquiries being sent to retailers is up a huge 67 per cent on June 2019.

As well as highlighting robust underlying car buying demand, this growth also reflects the change in buyer behaviour to make contact before visiting a forecourt.

Related: Workshops missing out on crucial revenue-generating opportunities, Castrol survey finds

Richard Walker, Auto Trader’s director of data and insights, said: “Although the huge growth in used car prices we’ve been tracking over the last few years may continue to soften over the coming months, there’s certainly no indication in current data that prices are set to tumble.

“That’s because the same market dynamics that helped fuel the record acceleration in growth are still at play, albeit to a far less dramatic extent.

“Despite the clear economic headwinds, we remain confident of continued consumer demand in the market, which coupled with ongoing supply challenges in both the new and used car market, prices will remain strong for the foreseeable future.”

Sue Robinson Chief Executive of the NFDA, added: “Demand for used cars from consumers remains solid. The supply of desirable good quality vehicles is still in short supply, which continues to keep vehicle values buoyant.”

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

The reCAPTCHA verification period has expired. Please reload the page.

Have your say!

0 0

Lost Password

Please enter your username or email address. You will receive a link to create a new password via email.