Continued price strength reflects confident outlook for market health
The latest pricing update from Auto Trader's marketplace
Despite the current lockdown restrictions in place across the UK, the latest data from Auto Trader revealed used car prices remain very strong. Based on the circa 514,000 vehicles advertised on its marketplace, last week (8th – 14th February) average prices increased 6.5% year-on-year (YoY) on a like-for-like basis. Whilst the rate of growth has slowed slightly since the peak of 8.5% in mid-December (w/c 21st December), it marks 41 weeks of consecutive price growth.
Although there’s some continued pressure on supply, the lockdown is having less impact on demand than previous lock downs. Last week, there were 14.2 million visits to Auto Trader, which is an increase of 4.5% on the same period last year and consumers spent a total of 139.6 million minutes on the marketplace, up 4.4% YoY.
Retailers hold firm
Looking at the pricing behaviour of retailers last week, the number of those making price changes and the value of their adjustments is generally in line with pre-COVID levels and consistent with what would normally be expected in January and February.
Last week an average of 2,448 retailers made daily price adjustments, which is just four fewer than the same period last year. A total of 17,608 vehicles were repriced during the week, and in terms of the adjustments being made, the average reduction was £290, which is at the lower end of the £250-£550 typically adjusted during normal trading conditions. It’s indicative of retailers holding firm with their pricing strategies.
Commenting, Auto Trader’s director of data and insight, Richard Walker, said: “Whilst the current challenges are clear, we continue to see reasons for positivity, and expect to see another period of healthy retail demand once restrictions are eased. In addition to the strong consumer metrics we’re recording on our marketplace, there are a number of key external factors which will help drive strong automotive demand post lockdown. These include positive sentiment towards car ownership, the ongoing aversion to public transport and reduced spending in other retail categories.
“What’s more, the latest Bank of England findings show average household finances are better off than they were pre-pandemic. This reflects our own research which suggests consumers' confidence in being able to afford their next car was at its highest level since we began tracking it in January 2020.”
Diesel and petrol price growth eases
Looking at the data on a more granular level, the movements in petrol and diesel prices largely mirror the wider market, with both recording robust rates of growth, albeit slowing slightly on previous weeks.
The average price of a used diesel car increased 8.7% YoY last week, which was a marginal decrease on the 8.8% recorded the week before. Used petrol prices grew a more conservative 6.0% YoY, however, it marked a slightly steeper easing on the 6.4% the prior week.
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