Auto Trader predicts that used car values will continue to grow, while consumer demand continues to outstrip supply.
The average price of used cars has seen continued growth each week since May and this growth is accelerating, according to data from the online marketplace.
Richard Walker, Auto Trader’s director of data and insights, said: “It’s not just that prices are up right now; ever since retailers have been able to restart their sales, used car prices have seen sustained growth for more than 10 weeks and it’s clear this growth is accelerating.
“It’s imperative to consider all market factors when evaluating price. Price is driven by supply and consumer-driven demand, and although supply has been constrained with auction houses being slower to reopen since lockdown, they are returning to over 90% of pre-COVID-19 levels.
“We encouraged retailers to retain their prices during lockdown which paid off and the industry is seeing the benefits of that now. This message still stands; prices remain robust overall, they are growing in the majority of segments and there are no indications to suggest retailers need to start reducing them.”
The average price of a used car listed on Auto Trader was £15,025 in the week of July 6. In the week commencing July 6, the average price of a used car increased by 4.4% year-on-year (on a like-for-like basis). Looking at the data on a more granular level, it’s a positive picture across segments, ages and fuel types.
The average price of a petrol car grew by 5.4% in the week commencing July 6 (year-on-year), having seen sustained growth for 19 weeks. For the same time period, the average price of diesel cars grew 4.1%.
Alternatively fuelled vehicles (AFVs), of which there are much lower volumes compared with traditional combustion engines, have seen more nuanced price movements. Electric vehicle prices rose by 2.7% while prices of hybrid vehicles depressed by -1.6%.
Volume brands are seeing particularly strong growth, increasing by 8.2% year-on-year, while premium brands are growing in price by 2.2%.
The average prices of vehicles up to 15 years old also increased, with particularly pronounced rises in older categories; those aged between 10-15 years grew by 6.6% in the four weeks up to July 13, compared to the same period last year. Meanwhile, prices for five to 10-year-old cars grew by 4.9% and for cars aged three to five years the growth was 4.2%.
The same positive trends can also be seen when comparing price evolution by body type. Particularly in the core segments representing the majority of the volume products in the used car market. In the four weeks to July 13, the average price of a hatchback increased by 8.3%, 3.5% for saloons and 1.7% for SUVs, when compared to the same time frame last year. Convertibles prices are strengthening week-on-week, however average prices are depressed year-on-year by -1.1%; this is because prices for this segment were very strong last year thanks to the hotter weather in the UK.