Used car prices continue climbing in January

Used car prices have continued to climb, reaching the 34th month of consecutive growth, according to Auto Trader.

It’s latest Retail Price Index shows the average retail price of a used car has reached £18,119 – up 2.7% year-on-year. Last month, prices grew by 3.4%.

Since May 2020, average used car prices have rocketed by more than £4,000.

Auto Trader’s director of Data and Insight, Richard Walker, said: “It’s hard to ignore the current political and economic disruption, but based on what we’re tracking, it’s having a very limited impact on the retail market.

“Crucially, demand for used cars remains robust, which along with the ongoing constraints in supply, is keeping prices stable, and with it, profits healthy. However, as our data highlights, the market is incredibly nuanced, and fluctuations in supply or demand can have an impact at a very granular level. It’s critical then, that retailers follow the data carefully to ensure the very best possible margin.”

The current stability in used car prices continues to be driven by the combination of robust consumer demand, and the ongoing squeeze in supply. Auto Trader’s marketplace data shows that the volume of cross platform visits increased 14% last month, against January 2022, while supply fell by 5% over the same period.

Used cars took an average of 40 days to sell in January, which is just one day slower than last year (39), but faster than pre-pandemic averages. On average, older cars were leaving forecourts the fastest in January, with those aged 10-15 years taking just 35 days, whilst 5–10-year-old-cars took a similarly above market average of 36. The slowest age cohort to sell, however, was 1-3-year-old-cars, which took an average of 47 days.

The growing demand for older and cheaper stock is not only resulting in a faster speed of sale for older age cohorts, but also stronger levels of price growth. Those cars aged 10-15 years old (which had an average value of £6,325 last month) increased 0.5% between December and January, and on a year-on-year basis, were up by 10.9%.

Sue Robinson, chief executive of the National Franchised Dealers Association (NFDA), added: “The used car market has entered 2023 with continued resilience, values have remained stable, and demand is buoyant. Franchised and independent dealers selling used car vehicles are looking to the year ahead with optimism after successful trading in January, and there’s little to suggest that there will be any drastic changes to the market any time soon.”  

Used electric vehicle (EV) retail values recorded the fifth consecutive MoM decline in January, dropping 2.1% from December to £36,179. Year-on-year, average EV values have fallen by 1.5%, while petrol was up 3.4% YoY and diesel was up 2.5%.

Aston Barclay reported that used EV values fell by £5,000 in Q4 2022.

Despite the uncertain economic and political back drop, consumer confidence continues to show signs of improvement. Auto Trader’s consumer research shows that more than three quarters (78%) of the circa 1,900 in-market car buyers surveyed in January are planning on buying in the next six months, and 27% in the next three months.

Top 10 cars for price growth Jan 22 vs 23:

Cars with largest price contraction Jan 22 vs 23: