The average retail price of a used car advertised for sale via Auto Trader rose for a fourth consecutive month during October – rising £178 on September and a £548 on August to reach £17,587.
Constrained new vehicle supplies now mean that 17% of nearly new cars advertised on the online platform are now priced above the on-the-road price of new equivalents offered via franchised car retailers, Auto Trader said.
October also marked the 31st month of consecutive year-on-year growth, with average prices up 8.1% on a like-for-like basis and 47% up on pre-pandemic October 2019.
This week AM reported similar trend at eBay Motors, where values rose for a third consecutive month in October as the imbalance of supply and demand continued to drive prices up, despite the cost-of-living crisis.
The trends are positive signs for a sector now bracing itself for the impact of the Bank of England’s record interest rates rise – to 3% – on lending terms and consumers’ appetite to buy cars.
But Auto Trader’s Director of Data and Insights, Richard Walker, said: “In the majority of cases the fundamentals driving used car price growth – a shortage of stock and robust levels of demand – remain in place.
“The market won’t be immune to the current financial uncertainties, but there’s a range of factors unique to the automotive sector which should insulate it from some of the broader economic disruption. From what we’re tracking, there’s no sign of average used car prices falling.”
Auto Trader said that it had seen consumer demand softening.
According to its latest data, the volume of advert views on its marketplace dipped 4% last month against October 2021, but remained 14% up in the more ‘normal’ trading conditions of 2019.
However, Auto Trader’s latest stock turn data showed used cars took an average of 25 days to sell in October – one day faster than in September and the fastest days to sell since October 2021.
Auto Trader commercial director Ian Plummer recently appeared on the AM News Show to discuss the used car retail sector’s key trends and the market forces set impact the sector in the coming months. You can view his interview, and others, by clicking here.
Auto Trader’s data on price movements by vehicle model appear to indicate that consumers are starting to shift towards smaller, more affordable vehicles as household finances come under increasing strain.
The top three appreciating cars last month were: the Fiat Punto, up 42.5% to £4854; the Peugeot 107, up 38.9% to £3642; and the Peugeot 207, up 37.7% to £2,757.
The Toyota Prius hybrid was the only car in the top 10 priced over £10,000 as its value rose 29.8% year-on-year to £14,881.
From a fuel-type perspective, the average price of a used electric vehicle (EV) and plug-in hybrid fell1.8% and 1% respectively month-on-month in October, Auto Trader said.
This was attributed to a combination of factors, not least levels of supply moving ahead of consumer demand, as well as a slowing speed of sale.
Commenting on the data published by Auto Trader, National Franchised Dealers Association (NFDA) chief executive Sue Robinson Chief said: “Auto Trader’s Retail Price Index reveals that the used car market has continued to perform against the backdrop of broader economic instability.
“Whilst demand is softening on last year’s record levels, there are signs of continued consumer appetite for used vehicles, which should make for a robust market over the coming months.”