March marks first acceleration in used car price growth in 10 months
The current average value of a used car is up 2.3% year-on-year and 0.7% month-on-month.
According to the latest data from the Auto Trader Retail Price Index, the current average retail price of a used car in March is £17,720[1], which is up 2.3% on a year-on-year (YoY) and like for like basis. Increasing from the 1.3% YoY increase recorded in February, it marks the first acceleration in the rate of YoY price growth in 10 months, having gradually slowed from the all-time high of 32.2% YoY in April 2022.
At a month-on-month (MoM) level, March to date is up 0.7% on February’s average prices, marking the third consecutive[2] MoM increase after the typical seasonal slowdown over the festive period. It’s well ahead of the 0.1% MoM growth recorded in both March 2022 and 2021, as well as the pre-pandemic average contraction of -0.4% MoM recorded in March between 2011 and 2019.
This positive trajectory reflects the current health of the used car market, which has maintained momentum since the start of the new year, with growth recorded in consumer demand and sales. Indeed, on Auto Trader, the volume of cross platform visits to its marketplace so far in March are up 20% YoY, following a 19% uplift in February, and 14% in January. Reassuringly, this growth in demand is translating into used car sales, which according to Auto Trader’s sales-proxy data
Auto Trader’s Market Health metric was positive for the second consecutive month in February, increasing 22% YoY, fuelled by the imbalance of supply and demand in the market. Due to the ongoing squeeze in supply (-12% YoY), and the growth in demand (9% YoY), Market Health for March to date is up 24%. It’s this strong level of demand in the market, coupled with the ongoing shortfall in stock, which is not only fuelling used car price growth, but is also supporting a healthy and profitable sales market.
As soon as we came out of the quiet festive period, we saw signs of a used car market in very robust health. The acceleration in the rate of price growth after 10 months of softening could not be a clearer barometer of the current market, which despite the wider economic and political backdrop, is going from strength to strength this year. Although growth rates may begin to soften again, with no immediate change expected in the current supply and demand dynamics, anyone predicting a fall in used car prices anytime soon will be disappointed.
EV price drop continues in wake of supply surge.
Despite the acceleration in YoY and MoM growth, average used car retail price growth is being held back by the ongoing contraction in used electric vehicle (EV) values (£33,060), which as of mid-March, are down -13% on the same period last year. In contrast, the average price of a used petrol (£16,102) and diesel (£16,236) car is up 4.3% and 2.4% respectively.
Auto Trader’s data, which is based on the broadest single view of electric vehicles in the market, shows that the drop in average used EV prices is the result of a huge overbalance of supply. Whereas traditionally fuelled vehicles are following the same trend in dynamics as the wider market, with the current supply of both used petrol and diesel cars down circa 20%[5] YoY, the rate of stock growth of used EVs has rocketed, with supply up a massive 261% YoY. And contrary to some reports that consumer interest in EVs is collapsing, on Auto Trader, levels of demand is currently up 47% on the same period last year.
The huge surge in supply is also evident at a more granular level. Since August, the iconic Nissan Leaf has seen stock levels increase a massive 313%[6], whilst supply of the Renault Zoe was up 235%, and the Tesla Model 3 up 148%. This dramatic uptick is resulting in a significant softening in values - since September, one year old Model 3 prices have fallen around £8,000 and show no sign of slowing.
Walker added: “Despite some of the recent reports, it’s clear that consumer demand for EVs remains very robust, so it’s important that we correct the myth that consumers don’t want them and that they don’t work. With the sub-5-year-old EV parc expected to grow 62% this year, we’ll need to work together as an industry to change the narrative and we need to change it fast to avoid more than just a pothole on the road to 2030. Encouraging car buyers into used EVs through incentives, marketing and information to demystify them will be critical.”
[1] Up to 18th March 2023
[2] January MoM 0.2%, February MoM 0.3%.
[3] Based on the volume of stock removed from Auto Trader in March.
[4] Cars took an average of 29 days to sell in March 2019
[5] Petrol supply down 19.1% YoY, diesel supply down 19.7% YoY
[6] As of February 2023
About the Retail Price Index
The Auto Trader Retail Price Index (RPI) is published monthly and provides an overview of the latest price and search data from our marketplace. Our team of data scientists monitor circa 900,000 vehicles each day, including 116,000 vehicle updates and an average of 39,000 vehicles added or removed from Auto Trader. Coupled with data from circa 450,000 trade car listings every day, as well as additional retailer forecourts and website data (OEM, 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 the Index is an accurate reflection of the live retail market.
About Auto Trader
Auto Trader Group plc is the UK and Ireland's largest digital automotive marketplace. Auto Trader listed on the London Stock Exchange in March 2015 and is now a member of the FTSE 100 Index.
The marketplace sits at the heart of the vehicle buying and selling journeys, with the largest number of car buyers and the largest choice of trusted stock. Auto Trader exists to Drive Change Together. Responsibly. It aims to grow both its car buying audience and core advertising business and is focused on changing how the UK shops for cars by providing the best online car buying experience, enabling all retailers to sell online. It aims to build stronger partnerships with its customers, use its voice and influence to drive more environmentally friendly vehicle choices and create a diverse business and inclusive culture.
Auto Trader publishes a monthly used car Retail Price Index which is based on daily pricing analysis of circa 900,000 vehicles, this data is used by the Bank of England to feed the broader UK economic indicators.
For more information, please visit https://plc.autotrader.co.uk/
For all media enquiries, please contact:
Andrew Nankervis | Andrew.Nankervis@autotrader.co.uk 07720 896760
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