Used car prices have risen for the 98th consecutive week, according to Auto Trader, with cars selling at the fastest rate in five months.
While growth remains “incredibly strong”, the recent run of massive acceleration that has characterised the used car market since spring of last year is showing signs of easing slightly, with the current rate of growth below the all-time high of 29% YoY recorded in the closing weeks of February.
Indicata’s latest Market Watch report shows wholesale prices have fallen by 1.1% since the start of the year and dealers remain “starved” of stock.
Despite current inflation rates, the latest consumer research conducted by Auto Trader suggests consumer confidence in affordability remains strong. Conducted in February, it found that nearly half of those surveyed were more confident in being able to afford their next car than they were last year. A third said car ownership is more important today than it was pre-COVID, which is a marked increase on the 25% recorded in February 2021, when the country was still under strict restrictions.
A separate study found that out of circa 4,000 car buyers, 42% intend to purchase within the next two weeks, which is up from 37% In January, and 35% in December.
Auto Trader’s data and insights director, Richard Walker, said: “Given the headlines over recent weeks, a slight softening in what has been a long period of exceptionally strong consumer demand is to be expected. However, it is not an indication of a market in reverse and anyone anticipating a sudden drop in prices will be disappointed.
“Despite the potential headwinds, demand remains buoyant, which combined with the ongoing pressures on new and used car supply, which the current conflict in Ukraine may constrain even further, will ensure used car prices remain high for some time to come.”
Indicata says trade buyers have shown “little appetite” to push up prices any further in the past few weeks, while retailers who have been blighted by long new car lead times want to avoid pushing prices too high and risk impacting used car sales volumes.
Jon Mitchell, Indicata UK’s group sales director, explained: “We have noticed prices slow down across all sectors of the market since Christmas which these figures back up. Retail demand for used cars remains very strong and stock levels are low, so it seems strange to be reporting a softening of prices.
“There is definitely a sense that the wholesale market feels prices are close to a ceiling but with new car production levels showing no signs of improving, prices could increase again in the coming months.”
The data insights business recorded a drop in wholesale prices last month, but branded it “just a blip” as the market settled after Christmas.
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