The average price of a used car increased 18.6% year-on-year to £17,754 last week on Auto Trader, driven by significant consumer demand.
Searches and advert views on the site were up 22.5% when compared with the same period in 2019. There was also more than 15.5m cross-platform visits last week, up 33% on 2019, while consumers spent 2.4m hours researching their next car on the site (up 21% on 2019).
Additionally, Auto Trader said another factor in the surge in prices, is the ongoing drop in levels of supply, which were down 13.3% last week versus 2019. The shortage of microchips and other raw materials which is directly and dramatically impacting worldwide supply of new cars is having significant knock-on effects on the remarketing supply of used cars.
Such is the huge acceleration in used car prices, Auto Trader noted that over 11% of the nearly new cars available in the market, those aged up to 12 months, are currently more expensive than their brand-new equivalents.
Richard Walker, Auto Trader’s data and insights director, said: “After months of continued acceleration, we’re seeing yet another record set for price growth rates fuelled by the unprecedented levels of consumer demand in the market.
“Whilst inflation, tax rises and the end of furlough do present potential future risks, there are a number of factors which give us confidence, not least the growth in motor transport levels, solid household finances, consumer confidence, and the increased appetite for car ownership seen in particular by the increasing mix of younger car buyers. This, coupled with the ongoing supply challenges in both new and used cars, means that we don’t see any reason for this growth to ease significantly anytime soon.”
Reflecting the current strength of the market, Auto Trader continues to see fewer retailers adjusting prices on fewer vehicles. More significant, however, is the fact retailers are currently adjusting prices up, rather than down in response to the record demand. In fact, of the 2,225 retailers who made daily price adjustments last week (329 fewer than in the same period in 2019), the average price adjustment was an increase of £39. This time two years ago, retailers were making an average reduction of -£334.