LSE: 747.80 GBP -1.80 (-0.24%)
Menu
Close
06 January 23 Press releases

Retail Price Index | December 22

 

Market enters 2023 on firm footing as used car prices and demand remain stable in December

Auto Trader data indicates the used car market has entered the New Year in a robust position, with both retail prices and consumer demand  stable in December. The Auto Trader Retail Price Index, which is based on daily pricing analysis of circa 900,000 vehicles across the market, and as of this month used by the Office of National Statistics to feed its inflationary measures, reveals the average retail price of a used car was £18,030 in December. It marks a 3.1% year-on-year (YoY) increase on a like-for like basis.

Although the rate of growth is down on previous highs, last month’s performance is off the back of the massive 30.5% YoY increase recorded in December 2021. And highlighting just how quickly and how sharply used car prices have risen in recent years, the average retail price of a used car in 2022 was a record £17,548; up considerably on the £15,204 recorded in 2021, the £13,538 in 2020, and the £12,999 in 2019.

 As per typical seasonal trends, retail prices saw a marginal decline between November and December, dipping -0.4% on a like-for-like basis. With the exception of 2021, average retail prices have fallen month-on-month every December since Auto Trader began tracking them in 2011 (e.g., dropping -0.4% in 2020, -0.2% in 2019, and -0.9% 2018), which is a consequence of the market easing over the festive period.

Consumer engagement sees December boost

Although consumer demand softened last year against 2021’s unusually high performance, it remains robust and well ahead of pre-pandemic levels. This is reflected on the Auto Trader marketplace, which saw the volume of used car enquiries being sent to retailers increase 27% in December, versus the same period in 2019.

More broadly, Auto Trader saw a significant spike in visits to its marketplace in December, increasing circa 10% YoY to nearly 61 million visits, which was due, in part, to its brand-new multi-million-pound marketing campaign, which launched on Boxing Day.

A further indicator of market health is the speed in which used cars leave retailers’ forecourts. Auto Trader’s data shows that used cars took an average of 29 days to sell in December, which is the fastest December since the start of the pandemic[1]. Although taking marginally longer to sell against 2021, cars sold faster in 2022 compared to pre-COVID levels, taking a monthly average of just 29 days to sell. This is versus a monthly average of 27 days in 2021, 31 in 2020, and 30 in 2019. The fastest selling used car in 2022 was the Toyota Yaris Cross, which took an average of just 16 days to sell.

Market on firm footing for year ahead

As it enters what’s set to be an uncertain year for the economy, these metrics offer a reassuring and stable outlook for the used car market. Whilst consumer demand may continue to soften, the market should be shielded to some extent from the full impact of the deepening cost of living crisis. This is due to a few key factors, not least the fact that for most, a car is a fundamental need, as highlighted in a recent Auto Trader study, which found that more than three quarters (77%) of the 2,000 people surveyed[2] need a car to get around (up from 71% in February 2020). Personal car ownership has only become more important in the wake of recent train strikes - the same research revealed that the disruption to public transport was cited by 50% of respondents as a key reason for owning a car (up from 36% in February 2020). With no end to the disruption in sight, this trend is only set to increase.

Stable levels of consumer demand, coupled with the ongoing constraint in supply (which shows no sign of improving anytime soon, and has been a big contributing factor to recent price stability) will ensure used car prices remain strong well into 2023. In turn, strong prices will continue to help maintain healthy profit margins.

 


 

In response to the barrage of negative newspaper headlines, one would be forgiven for predicting the worse for this year. But against a backdrop of political and economic turbulence, used car prices, and the market more broadly, has remained stable, which means we’re starting 2023 in a robust position. And whilst the market won’t be immune to financial instability, there’s a range of factors unique to the automotive sector which should insulate it from some of the more extreme economic disruption predicted for 2023. This gives us a cautious but confident outlook for the year ahead.

Key spokesperson

Richard Walker

Data & Insight Director

CONNECT

 


 

Sue Robinson, Chief Executive of National Franchised Dealers Association which represents car and commercial retailers across the UK commented: “As supply constraints have impacted the availability of new cars reaching forecourts and matching orders, the used car market has flourished in 2022. Auto Trader’s Retail Price Index for December reveals 3.4% year-on-year growth, and a staggering 33 months of consecutive year-on-year growth, highlighting the strength of the used car market. Franchised dealers remain cautiously optimistic going into 2023, that the market will remain in a stable position against the backdrop of economic uncertainty and that demand for vehicles will remain robust.” 

 


 

[1] December 2021 = 32 days, December 2020 = 41 days, December 2019 = 34 days.

[2] 2002 car buyers surveyed in July 2022

Share:
Up next
Auto Trader data to power Office for National Statistics' official measures of inflation
Read More
Retailers embracing digital are reporting more sales, more efficiency and more satisfied customers
Read More
Auto Trader is first FTSE 100 to achieve Gold Carbon Literacy status
Read More

Stay up to date

Follow us on our social channels to keep up with the latest news, insights and company developments.

 

If you would like to be added to our News & views mailing list, or have any media-related enquiries, please contact our press team:

Auto Trader UK

Auto Trader Insight

Auto Trader Life

Other Group sites

Looking to join the team?

Careers

Looking to buy or sell a vehicle?

Consumers

Keep in touch

Sign up to our email alerts service:

RNS alerts

Join our news & views mailing list
or submit media-related enquiries:

Contact our press team
  • @2024 Auto Trader Group plc. Registered in England with company number: 09439967.