Used car retail prices rise in April, as robust consumer demand fuels sales uptick
According to the latest data from Auto Trader, the second quarter has got off to a strong start for the used car market, with April recording growth in consumer demand, transactions, and retail prices. In fact, last month marked the first month-on-month (MoM) increase in a year1, with the market recording a 1.1% uptick on a like-for-like basis.
Auto Trader’s Retail Price Index, which is based on 800,000 daily pricing observations, shows that the monthly growth is in line with traditional seasonal patterns; every year since Auto Trader began tracking used car prices in 2011, April has recorded growth following the March plate change. Although slightly behind the pre-COVID average of around 2.2%, it offers a positive sign of the market returning to historic norms.
Although retail prices remain down on 2023 (-9.3%), the month-on-month uptick is being fuelled by favourable market dynamics. Indeed, whilst the volume of used cars entering the market fell -1.1% year-on-year (YoY) last month, the first contraction in supply levels since the summer2, consumer demand on Auto Trader was up around 9%, which is the highest rate of growth since December. As a result, Auto Trader’s Market Health metric, which assesses potential market profitability, rose over 10% over the same period, also marking the largest increase this year.
The strong demand is reflected in not only the circa 83.7 million cross platform visits to Auto Trader in April (up 8% on 2023), but also the speed in which used cars were sold. It took an average of just 27 days for a used car to leave retailers’ forecourts in April, which is one day slower than March (the fastest pace ever recorded), but two days faster than the same period last year.
As well as helping to stabilise retail prices, the very robust consumer demand in the market, which has remained constant since the New Year, is also driving sales. According to Auto Trader’s data, used car transactions increased around 6.3% year-on-year in April.
Reassuringly, Auto Trader’s consumer research points to sustained demand, with circa 80% of in-market car buyers surveyed3 claiming to be as confident in their ability to afford their next car as they were last year. What’s more, 81% of the car buyers surveyed4 said they were intending to buy their next car within the next 6 months, which is up from 77% the month prior.
Younger EVs outperforming market
The positive month-on-month performance flowed through the different segments of the market in April. However, despite exceptionally robust levels of consumer demand (up 56% YoY), used electric vehicles were the only fuel type not to record price growth, with average prices dipping -0.4% MoM. In contrast, both petrol (£14,955) and diesel (£14,659) cars saw average prices rise 1.3%, despite recording demand of 8.4% and -5.7% respectively.
Highlighting how nuanced the used car market remains, and the need to follow the data at a granular level to identify the most profitable opportunities, the average price of 1–3-year-old EVs rose 2.5% on March, whilst petrol cars of the same age increased 2.3%. 1-3-year-old diesel cars rocketed 4.3%.
2024 got off to a strong start, and it’s very reassuring to see it continue so confidently into Q2, with very robust demand helping retailers to sell more stock, more quickly. Disappointingly, prices do remain down year-on-year, but the month-on-month growth and return to seasonal norms is another positive sign of the retail market stabilising.
As ever, we continue to see plenty of nuance in the market, and so to ensure retailers are capturing the full potential available, I’d strongly urge retailers to utilise our valuations data, which is based on the largest single view of the retail market and available to all our partners."
It’s encouraging to see that the robust start of the used car market in 2024 has continued as we enter Q2. There are also signs that the market is returning to pre-pandemic levels. Despite this, it’s notable that whilst younger EVs are outperforming the market, used electric vehicles were the only fuel type not to record price growth demonstrating that the used electric market is still maturing.
Sue Robinson, Chief Executive of the National Franchised Dealers Association (NFDA)
Top 10 used car price growth (all fuel types) | April 2024 vs April 2023 like-for-like:
Top 10 used car price contraction (all fuel types) | April 2024 vs April 2023 like-for-like:
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 monitors circa 800,000 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’s largest automotive marketplace. It listed on the London Stock Exchange in March 2015 and is a member of the FTSE 100 Index.
Auto Trader’s purpose is Driving Change Together. Responsibly. Auto Trader is committed to creating a diverse and inclusive culture, it aims to build stronger partnerships with its customers and use its voice and influence to drive more environmentally friendly vehicle choices.
With the largest number of car buyers and the largest choice of trusted stock, Auto Trader’s marketplace sits at the heart of the UK car buying process. That marketplace is built on an industry-leading technology and data platform, which is increasingly used across the automotive industry. Auto Trader is continuing to bring more of the car buying journey online, creating an improved buying experience, whilst enabling all its retailer partners to sell vehicles online.
Auto Trader publishes a monthly used car Retail Price Index which is based on pricing analysis of circa 800,000 unique vehicles. The same data that powers the Index is used by the Office for National Statistics to make the UK’s official measures of inflation more robust, as well as the Bank of England to feed the broader UK economic indicators.
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