Press release

Retail Price Index | April 2020

USED CAR PRICES RECORD FIRST ANNUAL GROWTH SINCE JULY 2019 AS RETAILERS URGED TO ‘HOLD FIRM’

According to the latest data from Auto Trader’s Retail Price Index, which is based on pricing analysis of circa 900,000 vehicles every month, the average price of a used car in April reached £13,864. It marks the first year-on-year (YoY) growth on a like-for-like basis (albeit at 0.1%) since July 2019, which will come as welcome news for retailers concerned that valuation providers who rely on editorial opinion will adjust their valuations down sharply.

Since the beginning of the lockdown on the 23rd March, Auto Trader’s data scientists have observed a market that is largely on hold. To understand the scale of activity in the marketplace, they track the number of retailers making price changes, the number of stock items being repriced, and the value of that price adjustment.

In normal trading conditions, approximately 2,500 – 3,000 retailers adjust the price of their stock every day. Last week[1] this figure had fallen to approximately 1,075, a year-on-year decline of 63% and just 232 more than the previous week. Typically, 21% - 25% of retailers change prices on a daily basis, but last week, just 9% did, indicating the majority of retailers are yet to begin repricing stock.

Last week, an average of 6,000 vehicles were being repriced daily, which is 68% lower than the same period last year (circa 17,500 – 24,000). 56% of stock being repriced is by independent retailers.

In terms of the amount of readjustment, prior to the lockdown, of those retailers changing their prices, the average amount was £250 - £550. Last week the average price change was £277. The average reduction for independent retailers was £210, and for franchise retailers, it was £358. It highlights that whilst the movement in prices are coming back to pre-COVID-19 levels, there remains a small number of retailers adjusting a very limited volume of vehicles.

It comes at a time when the number of people searching for a new or used car on Auto Trader has returned to pre-COVID-19 levels, with over a million visiting the marketplace every day. 

Richard Walker, Auto Trader’s director of data and insights, commented: “We’re very mindful of our responsibilities to customers and to the wider market, and so we’ve been closely monitoring the pricing of hundreds of thousands of vehicles to ensure we’re providing the most up to date and accurate evidence based insights. As we saw during the 2008/09 financial crisis, large price adjustments on a mass scale will have a major detrimental impact on the financial health of the industry. We need to avoid a repeat of this scenario and so it’s reassuring to see that retailers are not cutting prices. With consumer demand returning to the industry, we see absolutely no reason for them to do so.

Any negative movement based on speculation or editorial opinion is likely to result in a self-fulfilling prophecy of sharply falling prices. We strongly believe retailers should hold firm on prices until the evidence suggests that they’re moving, which is more likely to result in any adjustment being a measured and gradual adjustment.

Fuel type prices

Last month, a paused market was evident in the performance of internal combustion engine (ICE) vehicles. The average sticker price of a second-hand petrol vehicle in April was £12,623, which on a like-for-like basis was a 1.7% YoY increase and the highest rate of growth since May 2019. And whilst diesel prices continued to contract, at -0.7% (£14,724) it marked the lowest rate of decline since June last year.

Alternatively fuelled vehicles (AFV) performed less positively, recording a -2% decline in average price (£22,132), the highest rate of contraction since July 2016. Similarly, the average price of a pure electric vehicle (EV) has fallen consecutively every month this year. In April, the average asking price of an EV was £25,657, -3.2% down YoY.   

9th May - 16th May

-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 resegmentation 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% prompted brand awareness and attracts circa 50 million monthly cross platform visits each month, with over 70% of visits coming through mobile devices.

The marketplace also has the largest pool of vehicle sellers (listing around 450,000 cars each day). Around 80% of UK automotive retailers advertise on autotrader.co.uk.

For more information, please visit https://plc.autotrader.co.uk/

For all media enquiries, please contact:

Andrew Nankervis | Andrew.nankervis@autotrader.co.uk

[1] 9th May - 16th May

As #cardealers re-opened their showrooms on Monday we saw the highest day for new car leads since we launched the new car platform. To find out more about #advertising your #newcars with us, email brandnew@autotrader.co.uk https://t.co/ke5xKYmGME
That's it for this week's webinar. Thanks to our guest @mikejonesase for joining us once again and be sure to register for next week's webinar at https://t.co/NiN0Kwzkit https://t.co/9pwRYEnOJa
Question for @MarcThornboroug - How can I manage sales in the current scenario?
Now over to Q&A - first question around what happens if I include admin prices in the full advertised price?
Update on the self-employed scheme – applications for a second grant to open in August. Allows you to claim 70% of average monthly trading profits, capped at £6,570
Great summary from @ASE_Global on what government support is currently available https://t.co/dg4Ge6nVi7
Delighted to welcome @mikejonesase from @ASE_Global back to provide the latest update on the #furlough scheme and #selfemployed income support scheme
When it comes to where to source your stock - @MarcThornboroug highlights that @dealerauction1 is offering a free 3-month subscription for new customers (even if you've had a free trial before). Request a call back and one of our account managers will get in touch to help you!
We've once again dusted off @MarcThornboroug to talk about restocking your forecourt to ensure you are #RetailReady
Great advice from @stuart_trader - be sure to reorganise your back end to cope with the surge in leads. A missed call could be a missed sale!

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

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