Used car prices continue to rocket as inflation rate reaches record high
As the latest figures reveal inflation hit another record high last month, the average price of a used car on Auto Trader reached £20,340 last week, a 29% like-for-like increase on the same period last year[1] and the 93rdconsecutive week of price growth. Such is the acceleration in used car prices, the average price of a used car on Auto Trader has increased over £4,200 in just six months; up from £16,096 in mid-August, at which point the rate of growth was almost half of what it is today (15% vs 29%).
This acceleration is being fuelled by the ongoing imbalance of supply and demand in the market – the ongoing constraints in new and used car supply, coupled with exceptionally strong levels of consumer demand. This demand is reflected in the huge number of used car enquiries being sent to retailers through the Auto Trader platform, which last week was up nearly a quarter (23%) on the same period last year.
Further evidence of this very strong demand is the faster speed at which retailers are selling cars. Last week it took an average of just 26 days for stock to leave forecourts. Although it’s a slight slow-down on the average 25 days recorded in pre-COVID February 2020, it’s 30% faster than the speed of sale recorded in 2021 (37).
Consumer sentiment survey points to sustained demand
Despite current inflation rates, the latest findings from Auto Trader’s consumer sentiment survey, conducted in January, suggest a minimal impact on buying intentions. Out of circa 4,100 car buyers, 37% intend to purchase within the next two weeks, which is up from 35% in December, whilst 26% intend to do so within the next three months. What’s more, 32% of those surveyed[2] believe car ownership is more important today than it was pre-COVID, which is a marked increase on the 25% recorded in February 2021, when the country was still under strict restrictions. What’s more, 51%[3] feel more confident in their ability to afford their next car than they did a year ago, which marks the highest figure since June 2021.
Although inflation will always pose a potential headwind for demand, based on the positive consumer metrics we’re tracking across the retail market, as well as broader economic factors such as the falling unemployment rate and record number of job vacancies, we don’t anticipate any significant easing any time soon. Accordingly, with such strong levels of demand, and no end in sight for the current supply challenges, we can expect the strong year-on-year price growth to continue well into the middle of the year.
Largest used car price increases and contractions by model
Such is the recent surge in price growth, just three of the bottom 10 performers last week saw prices contract.
|
Rank |
Make |
Model |
Average Asking Price |
Like for like price change |
|
1 |
SEAT |
Alhambra |
£18,645 |
55.0% |
|
2 |
Ford |
S-Max |
£15,066 |
52.6% |
|
3 |
SKODA |
Yeti |
£13,173 |
51.5% |
|
4 |
Toyota |
Auris |
£13,299 |
49.3% |
|
5 |
Renault |
Grand Scenic |
£10,655 |
48.6% |
|
6 |
Ford |
Grand C-Max |
£12,555 |
48.5% |
|
7 |
SKODA |
Octavia |
£16,876 |
48.2% |
|
8 |
Ford |
Galaxy |
£17,167 |
48.1% |
|
9 |
Land Rover |
Defender 110 |
£82,927 |
48.0% |
|
10 |
Ford |
Focus |
£15,572 |
46.9% |
|
10 |
Vauxhall |
Antara |
£5,878 |
4.6% |
|
9 |
DS AUTOMOBILES |
DS 3 CROSSBACK |
£21,976 |
4.6% |
|
8 |
Volvo |
V50 |
£4,447 |
4.3% |
|
7 |
Audi |
e-tron |
£64,136 |
4.2% |
|
6 |
BMW |
8 Series |
£57,980 |
3.0% |
|
5 |
BMW |
8 Series Gran Coupe |
£61,241 |
1.2% |
|
4 |
Chevrolet |
Captiva |
£4,833 |
0.3% |
|
3 |
CUPRA |
Formentor |
£35,817 |
-2.4% |
|
2 |
Porsche |
Taycan |
£118,083 |
-5.7% |
|
1 |
Mercedes-Benz |
G Class |
£92,918 |
-22.6% |
[1] w/c 7th February 2022 vs w/c 8th February 2021
[2] N=800
[3] 626
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