Used car prices in the UK continue to record strong levels of growth despite current lockdown measures, according to the latest data from Auto Trader.
Last week (11-17 January), the average retail price grew 7.7% year-on-year on a like-for-like basis, which is a marginal decrease from the 7.8% recorded a week earlier but marks the 37th consecutive week of price growth.
Auto Trader attributes the growth primarily to supply and demand, stating that the level of demand has been largely unaffected by the tightened restrictions on the supply network. Auto Trader’s website saw a 4% increase in visitors last week, rising to 11.4% year-on-year at the weekend. The number of leads being sent to retailers was also up, rising 9.4% year-on-year.
Richard Walker, Auto Trader’s director of data and insight, 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.
“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.”
Looking at the different fuel types, the average price of used diesel and petrol cars on Auto Trader followed a similar trend to the wider market, recording robust rates of growth last week. The average price of a used diesel increased by 9.5%. Although demand for the fuel type dropped 6.4%, the levels of supply fell more sharply at 9.9%.
In contrast, despite the levels of demand for used petrol increasing 3.1% year-on-year, it was outperformed by the levels of supply in the market, which increased 7.7% last week. However, the imbalance in favour of supply had minimal impact on price growth, with the average price growing 7.5% last week.