Press release

Auto Trader Retail Price Index | November 2020

Lockdown has little impact on used car prices, as growth remains strong

 

According to the latest data from Auto Trader’s Retail Price Index, which is based on pricing analysis of circa 900,000 vehicles, the average price of a used car was £14,041 in November, which on a like-for-like basis is an 8.5% year-on-year (YoY) increase. Whilst prices have increased consecutively for eight months, the rate of growth eased very slightly last month, slowing from 8.6% in October.

The strong price performance reflects the high levels of consumer demand in the market. Despite the forecourt closures in England and tightening restrictions across the UK, there were 52.9 million visits to Auto Trader last month, which represents a 14.4% increase on November 2019. Underpinning the level of demand in the market, advert views increased 8.9% YoY, whilst the number of leads grew 20% above the same period last year, indicating lockdown has done little to slow buyers’ desire to purchase their next car.

Retailers hold firm with pricing

Testament to the strength of the market the number of retailers making price changes and the value of price adjustments remains lower than pre-COVID levels. Circa 2,145 retailers made price changes last month, which was 12% fewer than in November 2019 (2,444), whilst the average daily reduction was -£293; 8% less than the same time last year (-£317). The average number of cars being changed each day was 13,818, which is significantly fewer than the 17,500 – 24,000 adjusted during normal trading conditions.

Petrol price growth eases as supply overtakes demand

Looking at the pricing data on a more granular level, we can see the influence supply and demand dynamics have on used car prices. Last month the rate of growth for used petrol vehicles began to ease for the first time in 12 months, albeit marginally, slowing from 9.0% YoY in October to 8.8% (£12,682). It’s due in part to the supply of used petrol cars in the market (5.7% YoY) overtaking levels of consumer demand (0.2% YoY).

Conversely, whilst the levels of demand and supply for diesels both contracted in November, average prices continued their steep trajectory, increasing from 8.8% YoY in October to 9.2%. This is because whilst demand fell -6.7% YoY, the rate of contraction for supply was even steeper, dropping -7.8% on November 2019.  

Commenting on the results, Auto Trader’s director of data and insight, Richard Walker, said: “Despite thousands of retailers across the UK either having to close their forecourts or facing tighter restrictions, used car prices remain exceptionally strong, which even under normal trading conditions would be impressive. It’s particularly reassuring to see retailers hold firm with their pricing, reflecting a strong degree of confidence in the health of the market. We share retailers’ confidence and believe the outlook for the months ahead is positive. We’re continuing to see significant levels of consumer demand, in part driven by the growing aversion to public transport.”  

 Used hatchbacks and MPVs see largest sticker price growth

Like-for-like prices continued to show strong growth across all age groups in November, with those aged over 15 years recording the highest rate of growth at 17.5% YoY (£4,760). It was followed closely by vehicles aged between 10-15 years, increasing 17.0% (£4,503). Interestingly, the same age group (10-15 years) saw the biggest monthly drop in levels of demand, falling from a healthy 2.3% YoY in October, to -11.1% YoY in November.

All body types recorded an increase in average prices last month, with hatchbacks recording the highest rate of growth, up 12.5% YoY (£9,309), followed by MPVs, which grew 10.01% (£9,642). Despite the price growth however, demand for used hatchbacks fell -5.9% YoY, versus a 6.8% increase in supply. It marks the first-time levels of demand for hatchbacks have contracted since May of this year. SUVs continue their run as the most popular body type, with demand increasing 6.4% YoY (£19,214).

Both premium and volume brands saw average prices grow in November, increasing 8.3% YoY (£20,827) and 12.2% (£9,253) respectively. However, the rate of growth for volume cars eased slightly, slowing from 12.6% YoY in October, to 12.2% in November. As observed elsewhere in the market, this is due to the imbalance of supply and demand; demand for volume cars contracted for the first time in six months, dropping -10.3%, whilst supply did the opposite, increasing for the first time since May 2020.

 Sue Robinson, NFDA Chief Executive, added: “Despite the lockdown and additional restrictions facing dealers across the UK, it is encouraging that used car prices have remained buoyant in line with consumer demand. Positively, the number of retailers adjusting their stock as well as the volume of cars whose price is being adjusted are both significantly lower than pre-COVID 19 levels, which shows dealers’ resilience and confidence. We look forward to a strong December.”

 

-ENDS-

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.

Our CEO Nathan Coe will be live on next week's webinar to answer your questions. You can submit your questions to him in the comments and when you register to join the webinar live at https://t.co/rdtNiD8APu https://t.co/d99VfhPofQ
Last week saw the 89th week of consecutive used car price growth, with prices rising 28.6% year-on-year. With used car prices continuing to rise it’s crucial to keep repricing your stock inline with the market to ensure you aren’t leaving profit on the table. https://t.co/MRHJVoNvzs
2021 was a record year for new electric vehicles on our marketplace which saw a record number of advert views in 2021, with 1 in 5 new car advert views now for an electric vehicle. What EVs do you think we'll see drawing the most attention in 2022? https://t.co/niblnnJaPl
Looking to evolve your business by breaking free of outdated data feeds and enabling your customers to have a real-time view of your digital forecourt? Then check out our ‘Essentials to connected retailing’ masterclass now 👉 https://t.co/VggO5GDvFa https://t.co/hRUW9aXDTf
We’re still faced with an element of uncertainty when it comes to the pandemic which means you need to be prepared for any eventuality. So in this week’s tip of the week, @AndrewKorpela shares some top tips on how to make sure you're prepared for whatever is thrown at you next. https://t.co/9cKawLT6Q9
In his latest update, our CEO Nathan Coe shares our latest market insights, including an analysis of consumer demand and pricing, and reveals our plans for 2022. https://t.co/oyxwpJf2U1
With record numbers of new electric vehicle sales and, as we reveal in our latest blog, an electric vehicle being the fastest selling of any used vehicle in 2021, last year really was a victory for voltage 👇 https://t.co/j4Al3nByBL
In our latest Monthly Market Intelligence Report, we analyse the 3 key trends that came to define the automotive industry in 2021, record demand, the growth in used car prices and the acceleration of EV adoption 👉https://t.co/tVW6vpQjxm Will these trends continue through 2022? https://t.co/rITl15odBm
A quick summary of what we have covered in today's webinar from @ClarkRjoclark. https://t.co/QFgNQYhCR8
Prices then are still strong, but we are still seeing under-priced stock on our marketplace which means there is profit being left on the table. It's key then to monitor the live market prices and re-price to the live market value to avoid missing out on profit. https://t.co/3jGvyFVPIn

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