Press release

Lockdown has little impact on used car prices as demand drives strong rates of growth

According to the latest data from Auto Trader, based on the circa 510,000 vehicles currently advertised on its marketplace, used car prices continue to record strong levels of growth despite the current lockdown measures in place across the UK. Last week (11th – 17th January), the average retail price grew 7.7% year-on-year (YoY) on a like-for-like basis, which is a marginal decrease from the 7.8% recorded a week earlier but marks the 37th consecutive week of price growth. 

The increase continues to be driven primarily by supply and demand dynamics. Whilst the tightening restrictions are adding pressure on supply networks, the healthy level of demand in the market has been largely unaffected, evidenced in the 4% increase in visits to Auto Trader last week, which grew to 11.4% YoY at the weekend. With a daily average of 1.3 million users, the strong consumer engagement on its marketplace resulted in a 9.4% YoY increase last week in the number of leads being sent to retailers. 

Retailer pricing behaviour

In terms of how the measures have influenced retailer pricing behaviour, based on the number of retailers making price changes and the value of their adjustments, activity remains relatively consistent with January 2020.

Last week’s average of 2,325 retailers making daily price adjustments is 175 fewer than the same period last year, and below the pre-lockdown average of 2,500 – 3,000. However, a total of 18,078 vehicles were repriced during the week, which falls within the levels typically seen during normal trading conditions (17,500 - 24,000), albeit at the lower end. In regard to the price reductions being made, pre-COVID-19 retailers typically lower prices between £250-£550 per day. Last week the average price reduction was £325 which similarly remains at the lower end of the scale.

Commenting, Auto Trader’s director of data and insight, Richard Walker, said: “Nearly three weeks after the Prime Minister announced the third lockdown, we have a much clearer view of what impact the new restrictions are having. Once again, as we’ve seen consistently over the last year with the various measures that have been introduced across the UK, it’s done little to dampen consumer demand, which has helped used car prices to continue recording exceptionally high rates of growth.

 “This price growth, which we’ve been tracking for close to eight months, has helped drive robust profit margins, and for this reason we continue to urge retailers to hold firm. Whilst retailers are currently limited to online retail channels, with the current levels of supply and demand in the market, along with the margins available, we don’t see any reasons to suggest a different approach to pricing.”

 Drop in diesel demand does little to dampen price growth 

Looking at the different fuel types, the average price of used diesel and petrol cars on Auto Trader followed a similar trend to the wider market, recording robust rates of growth last week. The average price of a used diesel increased 9.5%. Although demand for the fuel type dropped -6.4%, the levels of supply fell more sharply at -9.9%. 

In contrast, despite the levels of demand for used petrol increasing 3.1% YoY, it was outperformed by the levels of supply in the market, which increased 7.7% last week. However, the imbalance in favour of supply had minimal impact on price growth, with the average price growing 7.5% last week.

Hatchbacks and estates see largest price growth, but SUVs most in demand

Like-for-like prices continued to increase across all body types, with hatchbacks and estates recording the highest rate of growth, up 8.8% and 8.6% YoY respectively. However, SUVs remain the most in demand, increasing 12.2%, helping to fuel a 7.0% price growth.

Great to see DealerDesk utilising our API to enable retailers to instantly publish and update their Auto Trader adverts without the traditional wait for old-fashioned stock feeds! https://t.co/RyCrCG1fl0
August saw record levels of demand from consumers seeking out their next vehicle. But with supply issues continuing, what can you do to ensure your forecourt remains stocked to meet demand? Find out in our latest blog by @MarcThornboroug👇https://t.co/tUerFkP4Qf
Register for our next webinar where we’ll be exploring the latest in automotive logistics with special guest Thomas Mallet of Ecomotive Logistics. We’ll also be sharing our final step in addressing admin fees along with an update on the market 👉 https://t.co/GWNbgNrxVg https://t.co/SNIlt3nfcE
155,000 vehicles are underpriced on Auto Trader, meaning that there is a staggering amount of profit being missed out on by retailers. Find out more and what you can do to ensure you’re not leaving any profit on the table in this week’s tip of the week with @AndrewKorpela https://t.co/vj8Ux1Z2Jn
The popularity of electric vehicles continues to grow with the @Hyundai_UK IONIQ 5 being the most viewed new car on our platform over the last month. Will we see an electric vehicle top of the list next month and what needs to be done to sustain interest? Let us know👇 https://t.co/gNbRriDIiV
The @KiaUK Soul EV came out top among consumers looking for an EV that offers great value, taking the Best Value Electric Car at the Auto Trader New Car Awards 2021. https://t.co/LcVmx4kwKO
Demand for vans continues to increase with last month seeing the number of leads per new van on our marketplace grow a staggering 44% compared to August 2020, a new record. Overall van leads are also up by 30% vs 2020. https://t.co/6h2zt1D54r
On 22nd September we’ll complete our admin fees journey by adding the admin fee into the total advertised price and reflecting this in our valuations and price indicators. Find out more in our latest blog👇 https://t.co/ZVRpYhssAA
We're delighted to be supporting this year's @BenSupport4Auto Ben Ball taking place on the 8th Dec at the Roundhouse. There are now just a handful of tables left so be sure to book yours now to avoid missing out 👉https://t.co/6jC6ZaoEND https://t.co/zQCWD0JCRg
Our latest Monthly Market Intelligence report is now live. Check it out now to discover our latest new and used car market insights along a focus on EV pricing👉https://t.co/g8bPs1X6CE https://t.co/gB6Zh0p8rF

Auto Trader Group plc
Registered in England (Company number: 09439967)

Auto Trader Limited
Registered in England and Wales (Company number: 03909628)

Registered address:

1 Tony Wilson Place
Manchester
M15 4FN
VAT number: GB 614 8918 20

Keep in touch

We use social media to speak to the UK’s largest car buying audience