USED PRICE GROWTH REMAINS ROBUST AS RETAILERS PAUSE REPRICING
- January marks 10 months of consecutive price growth for used cars, up 7.4% year-on-year
- On average 2,834 retailers made price changes in January, which was 8% fewer than the same period last year.
- Visits to Auto Trader increased over 4% year-on-year in January, with 60.1 million visits.
According to the latest results from the Auto Trader Retail Price Index, which is based on daily pricing analysis of circa 900,000 vehicles, the average price of a used car in January was £14,155: a year-on-year (YoY) and like-for-like increase of 7.4%. It’s the tenth consecutive month of price growth and marks a confident start to the new year.
The ongoing strength of pricing has been driven, in part, by ongoing supply constraints in the market, as well as the solid levels of consumer demand that remain despite the current lockdown restrictions. Last month, Auto Trader recorded circa 60.1 million cross platform visits to its marketplace, which is an increase of over 4% on January 2020. On average, there were over 1.3 million unique users on Auto Trader every day over the month.
Retailer pricing behaviour indicative of a paused market
The relatively robust health of the market, which according to Auto Trader analysis shows businesses were trading at 60% - 70% of normal volumes in January, was reflected in the pricing behaviour of retailers last month. Based on the number of those making price changes and the value of their adjustments, it’s consistent with the same trends observed in lockdown 2, and largely indicative of a market which has been paused.
The average daily reduction of pricing at £303 was only marginally lower than last year. In the last week we saw the average daily volumes of stock being repriced was 16,398. This is £377 less than the previous week but £2,757 more than we saw at the same time last year. We are seeing a higher volume of total stock on site when compared to last year so we would expect the overall volumes to be slightly higher than what we saw each day in 2020. On average 2,834 retailers made price changes in January, which was 8% fewer than the same period last year.
Commenting on the results, Auto Trader’s director of data and insight, Richard Walker, said: “From what we’re observing in the market, the current lockdown is following very similar patterns to what we saw during November’s. Price growth is strong, retailers are holding firm, and although sales have no doubt been hit in the short term due to the restrictions in place, all lead indicators of consumer demand remain robust. Along with the resilience and solid sales performance we’re seeing among our retailer partners, it gives us confidence we’ll see a quick return to health once the restrictions lift. And with the same demand and supply dynamics at play, the data doesn’t suggest any reason for big price corrections or adjustments in the coming months.”
ICE and electric price performance
Looking at the data on a micro level, the average price of a used petrol car in January was £12,821, which was a 6.9% YoY increase on January 2020. It’s a significant easing on the 8.1% growth recorded in December and is due to the current over balance of supply in the market, which increased 11.9% YoY last month, compared to demand, which fell -6.2%.
Whilst both supply and demand for used diesels fell in January, down -7.4% and -8.6% respectively, like-for-like prices continue to hold strong, recording a growth of 8.8% YoY, dipping very slightly on December’s 9% YoY. The average sticker price for a used diesel was £14,700.
In contrast to their ICE counterparts, electric vehicles (EV) continue to record strong levels of consumer demand. Indeed, demand for premium EVs increased 65.6% YoY in January. However, with a much stronger level of supply in the market, up 250%, prices contracted, albeit marginally at -0.9% (£46,226). Whilst demand for volume EVs was slightly more conservative, up 28.5% YoY, the gap between levels of supply was significantly smaller at 109.6%, helping to drive average prices up 10.4% last month (£19,385).
Sue Robinson, NFDA Chief Executive, added: “It is encouraging that average used car prices remain strong indicating a healthy market with strong consumer demand despite the lockdown, which is also reflected by retailers’ general optimism about car sales in 2021. The robust interest in electric vehicles is positive: with a maturing second-hand market, the improving charging infrastructure, and retailers working hard to inform their customers, there are reasons to be confident this trend will continue.”
About the Retail Price Index
The Auto Trader Retail Price Index is published monthly and provides an overview of the latest price and search data from our marketplace. Our team of data scientists monitor hundreds of thousands of vehicles each day, including 90,000 vehicle updates and an average of 19,000 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.
As of March 2020, the methodology for the Auto Trader Retail Price Index was adapted based on re-segmentation of our data. We have regrouped car segments into more meaningful classifications of the different types of vehicles that consumers buy, from an even greater depth of data than before. As we now have a more detailed dataset, we have restated figures for prior periods to reflect the change in methodology.
About Auto Trader
Auto Trader Group plc is the UK and Ireland's largest digital automotive marketplace. Auto Trader sits at the heart of the UK's vehicle buying process and its primary activity is to help vehicle retailers compete effectively on the marketplace in order to sell more vehicles, faster. Auto Trader listed on the London Stock Exchange in March 2015 and is now a member of the FTSE 100 Index.
The marketplace brings together the largest and most engaged consumer audience. Auto Trader has over 90% consumer prompted brand awareness and attracts circa 57 million monthly cross platform visits each month, with over 80% of visits coming through mobile devices.
For more information, please visit https://plc.autotrader.co.uk/who-we-are/about-us/
 Sales proxy data based on the levels of stock removed from Auto Trader.
 Premium EV brands categorised as: Audi, BMW, Mercedes-Benz, Jaguar, Land Rover, Tesla
 Volume EV brands categorised as: Ford, Vauxhall, Nissan, Peugeot, Citroen, Kia, Hyundai, MG, Renault.