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.

Over 75% of all time spent on UK automotive sites is spent on Auto Trader. 20% more leads were delivered to retailers in 2021 than in 2020, a sign of strong buyer intent and the ever-increasing importance of online in the buying process. https://t.co/AySv9w7RwG
Over 75% of all time spent on UK automotive sites is spent on Auto Trader. 20% more leads were delivered to retailers in 2021 than in 2020, a sign of strong buyer intent and the ever-increasing importance of online in the buying process. https://t.co/YiU38W6Vc5
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

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