AUTO TRADER DATA STRENGTHENS THE UK'S INLFATION STATISTICS
The Office for National Statistics (ONS) is using Auto Trader’s market pricing data to make the UK’s official measures of inflation more robust, including the Consumer Prices Index (CPI) monitored by the Bank of England. The ONS has already used its figures for experimental estimates, but as of today (for the figures covering February) Auto Trader data has been fully incorporated into the headline statistics to help represent the movement in used car prices more accurately.
The ONS is the UK’s largest independent producer of official statistics and the recognised national statistical institute of the UK; its main responsibilities are collecting, analysing and disseminating statistics about the nation’s economy, society and population. It reports directly to the UK Parliament. The partnership with Auto Trader marks an important milestone in its programme of transforming its consumer price statistics, which includes identifying new data sources - such as Auto Trader’s used car pricing analysis.
Prior to the partnership, official inflation in car prices was calculated by tracking a sample of around a hundred different models at three different ages, taken from a manual of industry guide prices. Sometimes it was necessary to estimate prices for some months, which risked missing key trends and behaviours. Using Auto Trader data will significantly boost the quotes it uses in this area to circa 300,000 monthly price quotes (around 3,000 times more), helping the ONS stay ahead of new trends, and most importantly, to further strengthen the UK’s inflation statistics, something Auto Trader feels very privileged to support.
The ONS will benefit from the same data set that powers Auto Trader’s award-winning valuations, as well as its monthly Auto Trader Retail Price Index, which is based on a daily pricing analysis of 800,000 vehicles. It combines data from circa 450,000 car listings every day with additional retailer forecourts and website data (manufacturer, fleet and leasing disposal prices and pricing data from over 3,000 car dealership websites and data from major auction houses across the UK), ensuring it is the most accurate reflection of the live retail market.
While both the Auto Trader Retail Price Index and the ONS’ Consumer Prices Index are based on the same data, there will be variances in the respective headline figures. This is due to different methodologies and independent analytic decisions, such as accounting for outlier vehicles, product grouping, and other calculation differences. Despite two different groups of statisticians and data scientists, the resulting estimates are similar.
Car prices are heavily influenced by changing market dynamics, which can move at an incredible pace. We work with nearly 14,000 automotive retailer partners, list an average of 450,000 vehicles every day, and receive around 80 million consumer visits each month. This unique view of the automotive retail market means we’re able to provide the most accurate and current pricing data available, which we hope will help the ONS stay ahead of new trends and help further strengthen the UK’s inflation statistics, something we feel very privileged to support.
Mike Hardie, Deputy Director, Prices Transformation at the Office for National Statistics, added: “Today sees an important step in ONS’s economic statistics transformation journey. Feeding into today’s inflation measures, for the first time we have gone live with an improved measure of second-hand car prices using data from Auto Trader. This data partnership increases the number of second-hand car prices used each month in consumer price inflation from around a hundred to around 300,000 price points. This marks another improvement in our inflation measures, and in how the ONS responds to user demand for more tailored, timely and granular data, through using innovative methods and partnerships.”
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