Average used car prices in January increased by 7.4% year-on-year to £14,155, representing the ninth consecutive month of price growth, according to the Auto Trader Retail Price Index.
Based on a pricing analysis of around 900,000 vehicles, the price index has revealed the effects of ongoing supply constraints in the market, combined with solid levels of consumer demand despite persistent lockdown restrictions.
In February, Auto Trader registered an increase of more than 4% of cross platform visits to its marketplace, when compared to January 2020, reaching a value of around 60.1m. Across the month, there was an average of more than 1.3m visitors to Auto Trader each day.
Richard Walker, Auto Trader’s director of data and insight, said: “From what we’re observing in the market, the current lockdown is following very similar patterns to what we saw during November’s.
“Price growth is strong, retailers are holding firm, and although sales have no doubt been hit in the short term due to the restrictions in place, all lead indicators of consumer demand remain robust.”
According to further data from Auto Trader, most retailers are currently trading at 75% of normal volumes, which is reflected in the pricing behaviours of retailers last month.
The average daily price reduction of £303 is slightly lower year-on-year, whilst the average daily volume of stock being repriced was £16,398 which is £377 less than the previous week.
Price changes were made by an average of 2,834 retailers in January, an 8% decline when compared to the same period in 2020.
Based on the number of those making price changes and their value, this trend is consistent with the shifts observed in the second lockdown and is indicative of a market put on hold.
Due to the solid sales performance amongst retail partners, Walker is confident that “we’ll see a quick return to health once the restrictions lift”.
He concluded: “With the same demand and supply dynamics at play, the data doesn’t suggest any reason for big price corrections or adjustments in the coming months.”