The average value of a used car advertised on the Auto Trader website grew for a 37th consecutive week despite restrictions placed on the market by COVID-19 ‘Lockdown 3’.
Earlier this month the online classified advertising specialist once again renewed its call for car retailers to “hold firm with their prices” amid optimism that pricing will remain strong in Q1 – despite the showroom closures of COVID-19 ‘Lockdown 3’.
And it appears that their message was heeded.
Data from last week (January 11 to 17) showed that the average used car retail price grew 7.7% year-on-year (YoY) on a like-for-like basis.
The figure was a marginal decrease from the 7.8% recorded a week earlier, Auto Trader said, but marked the 37th consecutive week of price growth.
While Auto Trader acknowledged that tightening COVID-19 restrictions had been adding pressure to supply networks, it added that healthy consumer demand had been evidenced by a 4% increase in visits to its platform last week, growing to 11.4% YoY at the weekend.
‘High rates of growth’
Auto Trader’s director of data and insight, Richard Walker, said: “Nearly three weeks after the Prime Minister announced the third lockdown, we have a much clearer view of what impact the new restrictions are having.
“Once again, as we’ve seen consistently over the last year with the various measures that have been introduced across the UK, it’s done little to dampen consumer demand, which has helped used car prices to continue recording exceptionally high rates of growth.”
Walker added: “This price growth, which we’ve been tracking for close to eight months, has helped drive robust profit margins, and for this reason we continue to urge retailers to hold firm.
“Whilst retailers are currently limited to online retail channels, with the current levels of supply and demand in the market, along with the margins available, we don’t see any reasons to suggest a different approach to pricing.”
Auto Trader’s data relating to car retailers’ used car pricing movements showed a year on-year decline of 175 making pricing daily adjustments last week (2,325).
A total of 18,078 vehicles were repriced during the week, which falls within the levels typically seen during normal trading conditions (17,500 to 24,000), albeit at the lower end, it added.
Supply and demand
Auto Trader reported that the average price of used diesel and petrol cars had recorded “robust rates of growth” last week.
The average price of a used diesel increased 9.5% as Auto Trader saw the impact of a 6.4% decline in demand counteracted by a 9.9% dip in supply.
Although demand for petrol cars rose by 3.1% YoY, meanwhile, supply increased 7.7% last week.
Auto Trader said that this imbalance had minimal impact on price growth, however, with the average price growing 7.5%.
Hatchbacks and estates see largest price growth, but SUVs most in demand
Like-for-like prices continued to increase across all body types, with hatchbacks and estates recording the highest rate of growth, up 8.8% and 8.6% YoY respectively.
SUVs remain the most in demand, increasing 12.2%, helping to fuel a 7% price growth.