The used car market has continued its recent success, with the average price of a used car on Auto Trader jumping 14.1% year-on-year to £14,781.
Such is the current strength of the used car market, Auto Trader revealed that the rate of price growth has doubled in just three months, rising from a comparatively conservative 7.1% in April.
Significant levels of consumer demand are fuelling the price rise, highlighted by traffic levels to the Auto Trader. In July, there were 67.5m cross-platform visits, representing a 29% increase on the same period in 2019, whilst consumers spent 10.2m hours researching their next car on the marketplace, which is a 22% increase.
Another testament to the underlying levels of demand in the market is the increased speed in which retailers are selling cars. Last month, it took an average of just 24 days for new stock to leave forecourts, five days faster than in July 2019.
As a result of the positive metrics, Auto Trader has revised its forecast for the year, predicting a market total of circa 8m used car sales in 2021. The company also anticipates Q2 2021 will be the highest quarter ever for used car transactions.
In the electric vehicle space, volume prices rose slightly from 9.2% year-on-year in June to 9.6% (£23,303) in July. Premium marques increased from -7% to -6.3% (£45,204). Auto Trader said the reason for this disparity is due to supply and demand: year-on-year demand continues to outstrip levels of supply in the EV volume market (107.2% vs 65% respectively) leading to positive price growth. Conversely, year-on-year supply continues to outstrip demand in the premium market (184.7% vs 105.4%), which is leading to the negative pricing.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
Richard Walker, director of data and insight at Auto Trader, said: “For the rate of price growth to double in just three months is really quite incredible and is testament to the exceptional levels of consumer demand in the market.
“Based on what we’re seeing more broadly, such as the strong levels of disposable income and savings, as well as improving consumer confidence and low interest rates, we have every reason to believe that these levels have the potential to remain for much, if not all, of 2021.
“What’s more, we have barely begun to scratch the surface in reclaiming the 1.4m ‘lost’ transactions in 2020 as a result of closed physical showrooms. It’s for these reasons we feel very comfortable in revising our forecast for this year at much higher rate than some commentators have suggested, to circa 8 million used transactions.”