The used car sector is showing continued good health in the face of COVID-19 ‘Lockdown 2’, according to Auto Trader.
According to the latest data published by the digital marketing platform the average used car’s retail price increased 8.3% year-on-year (YoY) on a like-for-like basis last week (November 9 to 15).
The growth was a marginal fall from the peak of 8.5%, recorded a week earlier, but last week still marked the 28th of consecutive price increases for used cars on Auto Trader.
Director of data and insight, Richard Walker, said: “As we’d expect from this time of year, there has been a gradual slowing of used car price growth on our marketplace over the last few weeks, but it’s important to remember this level of growth remains exceptionally high, and way above pre-COVID levels.
“The level of demand in the market is the biggest driver of price, and despite the national lockdown in England, we’re continuing to record a 17% YoY increase in visits, which underlines what little impact the tighter restrictions are having on consumer appetites.”
Walker added: “Our research shows that over 50% of car buyers are happy to buy through click and collect and home delivery services. So, whilst forecourts may be closed for many, with such high demand and strong profit margins available, retailers should have confidence in the data and make the most of this opportunity.”
Despite thousands of forecourts across England having to close due to ‘Lockdown 2’ restrictions, and the tighter restrictions being felt across the UK, Auto Trader reported that demand had increased 21.1% YoY last week, whilst supply was down 9.1% YoY.
The key KPIs meant a 33.2% increase in its ‘market health’ score as it recorded 12.9m visited to the Auto Trader marketplace – representing a 17.1% increase YoY.
Auto Trader, which called on England’s car retailers to “hold firm” with any pricing adjustments during ‘Lockdown 2’ earlier this month, said that last week saw an average of 2,204 retailers making daily price adjustments – down on the pre-lockdown average of 2,500 to 3,000.
A total of 13,468 vehicles were repriced, down on an average of 17,500 and 24,000 vehicles, with sticker prices generally lowered between £250 to £550 per day.
Demand and supply
With the rate of price growth showing signs of easing, Auto Trader said that the average price of used diesel cars increased by 9.4%, dropping slightly from the 9.6% peak recorded the prior week, as a 2.3% drop in demand was counteracted by a 7.5% dip in supply.
Despite a 4.9% increase in demand for used petrol cars being accompanied by a 5.9% increase in supply, a minimal impact was seen on pricing. The average price of a used petrol grew 8.4% last week, dropping slightly from the 8.7% the prior week.
Hatchbacks and estates recording the highest rate of growth among the various car body types, up 10.8% and 9.3% YoY respectively.
However, Auto Trader said that SUVs remain the most in demand, increasing 10.1%, helping to fuel a 6.8% price growth. MPVs saw the lowest rate of demand in the market, dropping 17.3% YoY, however prices remained stable, increasing rose 8% YoY.
Used cars aged 10 to 15 years continue to be affected by low levels of supply, which last week was down 6% YoY, resulting in a 14.4% increase in prices.
Both premium and volume brands recorded strong price growth in October as a result of demand outstripping supply in the market and Auto Trader said that this has continued into November, with the average price of used premium and volume cars increasing 7.9% and 10.4% YoY respectively.
There has been marginal easing on previous weeks, though, with premium prices slowing from a peak of 8.1% the prior week, and volume down from 10.8% the prior week, and a peak of 11.4% recorded during the week of October 5.