Second-hand car prices continued to grow in December after eight strong months, with average used-car prices registering an 8.1% Y-o-Y growth to £14,085, according to the Auto Trader’s Retail Price Index.
According to the index, which is based on daily pricing of around 900,000 vehicles, second-hand car prices in 2020 have seen an impressive annual growth of 4%, when compared with 0.5% in 2019.
The growth is attributable to supply constraints in the market and consistently strong levels of consumer demand.
Richard Walker, Auto Trader’s director of data and insight, said: “Whilst sales capabilities were limited to click & collect and home delivery, we saw millions of consumers visiting our marketplace and engaging with our retailer partners, which suggests there was a healthy market available.”
Online, Auto Trader recorded over 673m visits to its marketplace in 2020, an 11% increase from 2019. Undeterred by tighter UK restrictions in December, consumers continued to flock to the Auto Trader marketplace, registering a 20% Y-o-Y increase.
Despite an initial slowdown in website traffic during the run up to Christmas, from 27 December to 3 December Auto Trader saw a 30% growth in site visits when compared with the previous week.
Holding the line on pricing
Due to robust prices, the number of retailers making price changes, and the subsequent value of such changes, remain below pre-Covid levels. In December, 1,937 retailers made price changes, a decrease of 4.2% when compared with December 2019.
According to Auto Trader, the average number of cars being re-priced each day was 13,082, which is far fewer than the 17,500 to 24,000 typically adjusted during normal trading conditions.
Despite the recent increase in restrictions, Walker believed that January consumer demand will remain robust as indicated by early signs.
Walker advised: “Far from requiring a big correction in pricing, with such strong engagement we have every reason for optimism that prices will remain strong in Q1.
“As with the previous lockdowns, we strongly urge retailers to trust the data and continue to hold firm with their prices, which as we saw throughout 2020 helped ensure retailers achieved much stronger margins than if prices were adjusted unnecessarily.”