INDUSTRY URGED TO AVOID UNNECESSARY PRICE CORRECTION AS USED CAR MARKET ENTERS Q4 IN VERY ROBUST HEALTH
The used car market is entering the final quarter in very robust shape, with the latest data from the Auto Trader Retail Price Index revealing average prices were stronger than seasonal norms in September, while used cars sold at near record pace and retailers sold more stock than this time last year. With such strong fundamentals, retailers are urged to follow the data in the retail market to avoid losing out on vital margin potential.
Utilising the full scale of its data and technology capabilities, Auto Trader assesses over 800,000 daily pricing observations from across the whole retail market. It shows that the average price of a used car last month was £16,450, which is a -0.3% softening on a month-on-month (MoM) and like-for-like basis. Since 2011, when Auto Trader began tracking retail prices, September has typically seen a contraction of -0.6%.
The performance is being fuelled by the sustained levels of consumer demand, combined with the ongoing constraints in used car supply. In fact, whilst stock levels were down -5.4% in September, Auto Trader’s data showed that demand on its platform had risen for the third consecutive month, increasing 8% year-on-year (YoY). With demand outpacing supply, cars are selling faster; in September it took an average of just 27 days for cars to leave forecourts, which is one day faster than in August, and four days quicker than last year.
The subsequent result of these metrics is a buoyant retail market. Indeed, according to Auto Trader’s data, used car sales in September rose circa 5% on the same period last year, following the same positive trend recorded so far in 2024, which year-to-date has seen a 3.9% YoY increase.
With such strong demand and cars selling at near record pace, retailers are well positioned to price more confidently. However, circa 8,800 retailers are currently advertising around 60,000 cars with a high Retail Rating score below their market average, eroding their collective margin potential by approximately £31 million.
2024 has been consistently strong and as we enter the closing months of the year, it’s very reassuring to see no indication of that trend softening. Despite similar conditions this time last year, we saw many retailers adjust their retail prices in line with trends in the wholesale market, which resulted in a huge loss of margin potential. Whilst the used car market is buoyant, we know margins are becoming increasingly challenging to maintain, so I’d strongly urge retailers to listen to the retail data, and not unnecessarily lose out on profit potential available.
Used electric market is a ‘game of two halves’
While the market for brand-new electric vehicles continues to struggle, the health of the used EV market is in a more robust shape; demand is strong (up 50% YoY), cars are selling quickly (taking an average of 26 days), and prices are stabilising (down just -0.1% MoM). However, a more granular view of the data reveals the still maturing used EV market is a game of two halves.
As prices of 3-5-year-old electric cars (£19,221) continue to reach relative price parity with their ICE equivalents (£19,300 ), demand continues to rocket. In fact, demand growth on Auto Trader for this cohort was up circa 110% in September (petrol and diesel demand rose and fell 8.8% and -7.8% YoY respectively), whilst on average they took just 19 days to sell, over a week faster than the average used car and faster than any other segment of the market. Despite the ongoing growth in supply (up 118% YoY), such is the huge demand for these cars, prices rose 1.6% MoM in September, the strongest rise of any other segment.
Whilst the ‘middle-aged’ EVs are in many cases cheaper than ICE, nearly new electric models (those less than a year old) are almost £7,000 more expensive. And with brand-new EVs benefitting from an average discount of 11%, the nearly new models are proving to be more of a challenge for retailers to sell: they took an average of 43 days to sell in September, more than twice as long as their 3-5-year-old counterparts, and longer than any other segment.
Walker continued: “Used EVs are a particular bright spot this month, but as ever the market is very nuanced. It’s important to analyse the data forensically to find the best stock for your forecourt, but our insights should provide confidence in the opportunities the electric market is able to offer.”
Sue Robinson, Chief Executive of the National Franchised Dealers Association (NFDA), added: “The resilience of the used car market remains evident as we head into the final quarter of 2024, and with prices surpassing seasonal norms and cars leaving forecourts faster than last year, this is an encouraging sign for retailers. It is promising to see an increase in demand for used electric vehicles, particularly in the 3–5-year-old category, highlighting the developing market and shifting consumer preferences. This shift signals growing consumer confidence in electric vehicles as a viable, cost-effective alternative.”
Top 10 used car price growth (all fuel types) | September 2024 vs September 2023 like-for-like
|
Ranks |
Make |
Model |
Sept 24 Average Asking Price |
Price Change (YoY) |
Price Change |
|
|
1 |
BMW |
M5 |
£39,979 |
2.7% |
-1.0% |
|
|
2 |
Porsche |
Cayman |
£31,817 |
1.3% |
-0.7% |
|
|
3 |
Volkswagen |
up! |
£7,941 |
0.9% |
0.4% |
|
|
4 |
Hyundai |
i10 |
£8,315 |
0.9% |
-0.1% |
|
|
5 |
Kia |
Picanto |
£8,913 |
0.8% |
0.2% |
|
|
6 |
Porsche |
718 Cayman |
£64,195 |
0.5% |
-2.4% |
|
|
7 |
Audi |
RS4 Avant |
£41,717 |
-0.2% |
0.0% |
|
|
8 |
Audi |
R8 |
£71,822 |
-0.2% |
-0.7% |
|
|
9 |
Mitsubishi |
Shogun |
£13,432 |
-0.2% |
-2.0% |
|
|
10 |
Volkswagen |
Touareg |
£29,220 |
-0.6% |
0.1% |
|
Top 10 used car price contraction (all fuel types) | September 2024 vs September 2023 like-for-like
|
Rank |
Make |
Model |
July 24 Average Asking Price |
Price Change |
Price Change (MoM) |
||
|
10 |
Ford |
Mustang Mach-E |
£34,047 |
-20.6% |
-0.3% |
||
|
9 |
Hyundai |
ix35 |
£5,128 |
-20.7% |
-0.7% |
||
|
8 |
Polestar |
Polestar 2 |
£29,361 |
-20.8% |
-0.2% |
||
|
7 |
Nissan |
Leaf |
£11,756 |
-22.1% |
0.3% |
||
|
6 |
Audi |
e-tron |
£25,385 |
-22.5% |
-2.1% |
||
|
5 |
Citroen |
e-C4 |
£16,408 |
-22.8% |
-0.2% |
||
|
4 |
Nissan |
Pulsar |
£6,553 |
-23.2% |
-0.4% |
||
|
3 |
Vauxhall |
Corsa-e |
£14,846 |
-23.2% |
0.4% |
||
|
2 |
Mercedes-Benz |
EQC |
£32,021 |
-23.4% |
-0.8% |
||
|
1 |
DS AUTOMOBILES |
DS 3 |
£7,226 |
-23.5% |
-1.9% |
||
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 platform. 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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