Auto Trader Retail Price Index | February 2021
Price growth continues as market indicators point to strong retail demand post lockdown
According to the latest results from the Auto Trader Retail Price Index, which is based on daily pricing analysis of circa 900,000 vehicles, the average price of a used car in February was £14,096: a year-on-year (YoY) and like-for-like increase of 6.6%. It’s the eleventh month of consecutive price growth and reflects the robust health of the car market despite the current restrictions.
Since December, Auto Trader has seen a positive trajectory in audience performance, and during the final week of February, visitor levels had increased 8.8% YoY. This activity has also resulted in a continued growth in leads[1] with volumes up 32.9% compared to the same period in 2020. For February as a whole, there were 58.8 million cross platform visits to the Auto Trader marketplace, representing a 3.6% YoY increase, whilst the average number of daily users grew 6.8% to 1.4 million.
This notable upswing is reflected in the significant increase in retailer sales performance, which according to Auto Trader analysis[2], shows most businesses are currently trading at around 80% of normal volumes; up from around 65% in January.
Commenting on the results, Auto Trader’s director of data and insight, Richard Walker, said:
This sustained level of price growth, coupled with the strong consumer metrics we’re recording on our marketplace, gives us cause for optimism of very strong retail demand once forecourts are able to physically reopen next month. Add to the mix growing economic confidence, as well as the current operating performance of most retailers, we believe there’s good reason for a positive outlook for the weeks ahead.
Retailer pricing behaviour in line with last year
Based on the number of retailers making price changes and the value of their adjustments, February’s pricing strategies are consistent with those of last year, which given the restrictions, underpins the current market stability.
On average 2,454 retailers made price changes last month, which is up nearly 4% YoY, whilst the average daily price reduction of £271 was just £4 less than last year. On average, there were circa 16,949 price changes made each day; higher than the 13,200 recorded in February 2020. However, with higher volumes of total stock currently on Auto Trader, this additional activity is to be expected.
The data shows that franchise retailers are more active than their independent counterparts. Last week 63% of the stock that was re-priced was sat with franchised retailers and 37% with independents.
Richard continued: “Interestingly, we’re seeing a trend emerge of independent retailers being more driven by data in their re-pricing strategies; pricing to market from the start and adjusting in line with market movements. In contrast, there’s a far larger proportion of franchised retailers that price for a period at a premium and use a more traditional approach of reducing by set amounts after scheduled periods of time, such as 15, 30, 45 days etc. From what we’re observing, this behaviour risks negatively impacting their average days to turn, and, crucially, affecting bottom lines in the process.”
Demand cools for ICE in February, but remains fully charged for electric
On a more granular level, the average price of a used petrol car in February was £12,731, which was a 5.8% YoY increase. It’s a significant easing on the 6.9% growth recorded in January and is due to the current over balance of supply in the market, which increased 17.4% YoY last month, compared to demand, which fell -2.1%.
Whilst both supply and demand for used diesels fell in February, down -5.6% and -3.2% respectively, the diesel market remains in good balance seeing like-for-like prices continue to hold strong with price growth of 8.4% YoY, dipping very slightly on January’s 8.8% YoY. The average sticker price for a used diesel was £14,617.
In contrast to their fossil fuelled counterparts, electric continue to record strong levels of consumer demand, increasing 18.5% and 48.1% respectively for volume[3] and premium EVs[4]. However, whilst the average sticker prices increased 11.8% YoY for volume brands (£20,196), they declined -4.1% for premium (£43,881), due principally to fast increasing levels of supply in the market.
Sue Robinson, NFDA Chief Executive, added: “As used car prices remain at high levels for all fuel types, it is encouraging that retailers’ pricing behaviour continues to be in line with last year before the first lockdown, indicating a degree of stability in the market and optimism in the trade. Dealers are looking forward to safely welcoming customers back into showrooms as soon as it is allowed.”
[1] Leads are categorised as email, part exchange enquiries, finance enquiries, texts and chats
[2] Sales proxy data based on the levels of stock removed from Auto Trader.
[3] Volume EV brands categorised as: Ford, Volkswagen, Vauxhall, Peugeot, Nissan, Citroen, Kia, Hyundai, MG, Renault, SEAT, SKODA, Honda, Toyota, Fiat, Suzuki, Mazda, Mitsubishi, Smart, Dacia, Jeep, Subaru
[4] Premium EV brands categorised as: Audi, BMW, Mercedes-Benz, Land Rover, Jaguar, Tesla, Volvo, MINI, DS AUTOMOBILES, Lexus, Abarth, Alfa Romeo
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