Press release

Retail Price Index | February 2022

Used car price growth hits another all time high as record trajectory shows signs of stabilising

The latest Auto Trader Retail Price Index, which is based on daily pricing analysis of circa 900,000 vehicles, revealed that average used car prices are continuing to increase to record levels, with the average sticker price increasing 31.9% on a year-on-year and like-for-like basis in February. It marks the 23rd month of consecutive price growth.

Whilst it’s another month of record growth, the 0.6% rise on the 31.3% recorded in January represents the lowest monthly increase since April 2021, which was the point at which the already strong levels of price growth began to accelerate dramatically in response to the world-wide shortage in semi-conductors. Since then, the average price of a used car has increased nearly £4,000[1], and such is the level of acceleration last year the market recorded five years’ worth of growth condensed into just eight months. 

As YoY prices begin to overlap with previous highs (February 2021 was up 6.6% YoY), a slight easing in the levels of growth is to be expected. However, it is not an indication of a market in reverse. Whilst there are potential headwinds, such as growing inflation and the possible impact of the conflict in Ukraine, consumer demand remains robust, as reflected in the 12% increase in the volume of enquiries sent to retailers through the Auto Trader platform last month when compared to February 2021 (and 19% on pre-pandemic February 2020). What’s more, the speed in which used cars are selling has also accelerated significantly, with the average car taking 11 days fewer to leave forecourts in February 2022 when compared to the same period last year (27 days vs 38). Combined with the ongoing pressures on new and used car supply, which the current conflict may constrain even further, these market dynamics will ensure used car prices remain high for some time to come. 

One in five ‘nearly new’ cars priced above brand new equivalents

Further highlighting just how strong the used car market is, more than one in five (21%) of the nearly new cars currently available (those aged up to 12 months) are more expensive than their brand-new equivalents. This unprecedented situation is down to the same dynamics affecting the wider used car market i.e. very high demand – in this case from car buyers unable or unwilling to wait for a brand-new car to become available – coupled with very low supply of both new and nearly new cars. Remarkably, despite these unprecedented pricing dynamics between new and used cars, nearly new cars were selling on average 24 days faster last month than in February 2021 (30 days vs 54).

Commenting on February’s performance, Richard Walker, Auto Trader’s Director of Data and Insights, said: “Despite some early indications that the huge acceleration in price growth that we’ve been tracking since the spring of last year is starting to stabilise, no one should be mistaken into thinking this is the start of a fall in prices. Far from it. Used car values have been affected by strong levels of consumer demand in the market, combined with the ongoing new and used supply constraints, neither of which show any sign of slowing. Any suggestion therefore of a bubble bursting is based on pure speculation, and not the data, which clearly points to very high prices remaining for quite some time to come.”

EV demand surges ahead of ICE

Internal combustion engine vehicles saw levels of supply fall further last month as global chip shortages in the new car market continued to constrain used car availability, with the number of used petrol and diesel cars in the market dropping -5.2% and -14.4% year-on-year respectively. Whilst levels of consumer demand also dipped, decreasing -3.3% and -12.2% respectively, they remained above supply, and as a result, like-for-like prices for both used petrol and diesel cars performed very positively. The average price of a petrol car (£16,676) increased by 33.6% YoY and the price of a diesel car (£17,680) increased 31.7%.

Meanwhile, the average price of a volume[2] brand electric vehicle (EV) increased by 32.2% YoY (£26,220), whilst the average price of a [3]premium brand EV recorded a more conservative 19.6% (£50,653) increase. YoY demand saw downward month-on-month movements for both but remain exceptionally high with volume EV brands up 43.2% YoY (down from 77.4% YoY in January) and premium EV brands up 19% YoY (down from 41.9% YoY).

More retailers pricing to market

Auto Trader is seeing retailers become more active in adjusting their forecourt prices to reflect the fast-changing retail market. On average, 2,424 retailers made daily price adjustments in February, which is 30 fewer than the same period last year, but over 200 more than in January. What’s more, an average of 17,045 vehicles were repriced every day last month, which was circa 100 more than February 2021. The average price reduction was -£283, which was -£17 more than in February 2021, but based on the 31.9% increase in used car prices over the last 12 months, it represents a far smaller proportion of the total price.

Richard continued: “It’s very reassuring to see more businesses base their pricing strategy on the data - with today’s retail market moving so quickly, it’s never been more important to do so to ensure you’re getting the very best margin for your stock. Although retailers are making reductions, it’s worth bearing in mind that average prices have rocketed over 30% year-on-year, and so the adjustments are incredibly small, and highlights just how confident retailers are in the health of the market.”

Sue Robinson, Chief Executive, NFDA, added: "Despite signs of stabilisation as shown by the lowest month on month increase in price since last year, used car prices continue to grow. Franchised dealers are confident as, whilst supply issues impact the new and used market, consumer demand remains strong with the ever-growing appetite for electric vehicles.”

Top 10 price growth (all fuel types) | February 2022 vs February 2021 like-for-like

Such is the strength of the used car market, just one of the lowest performing models has seen prices contract.

Ranks

Make

Model

Feb-22 Average Asking Price

Price Change (YoY)

1

SEAT

Alhambra

£18,873

56.4%

2

Ford

S-Max

£15,048

52.8%

3

Toyota

Auris

£13,253

50.5%

4

SKODA

Yeti

£12,991

50.3%

5

Ford

Grand C-Max

£12,554

48.9%

6

Ford

Galaxy

£17,086

48.8%

7

Renault

Grand Scenic

£10,698

48.3%

8

SKODA

Octavia

£16,796

48.2%

9

Land Rover

Defender 110

£82,463

47.5%

10

Toyota

Yaris

£14,003

47.2%

Top 10 price contraction (all fuel types) | February 2022 vs February 2021 like-for-like

Rank

Make

Model

Feb-22 Average Asking Price

Price Change

10

Tesla

Model 3

£47,821

5.8%

9

Vauxhall

Antara

£5,837

5.6%

8

Mazda

CX-30

£24,824

5.6%

7

Subaru

Forester

£21,384

5.2%

6

Audi

e-tron

£64,018

4.7%

5

Volvo

V50

£4,511

4.6%

4

DS AUTOMOBILES

DS 3 CROSSBACK

£21,936

4.3%

3

BMW

8 Series Gran Coupe

£61,215

2.0%

2

CUPRA

Formentor

£35,875

0.9%

1

Porsche

Taycan

£118,868

-2.3%

[1] Up from £13,973

[2] Volume EV brands categorised as: Ford, Volkswagen, Vauxhall, Peugeot, Nissan, Citroen, Kia, Hyundai, MG, Renault, SEAT, SKODA, Honda, Toyota, Fiat, Suzuki, Mazda, Mitsubishi, Smart, Dacia, Jeep, Subaru

[3] Premium EV brands categorised as: Audi, BMW, Mercedes-Benz, Land Rover, Jaguar, Tesla, Volvo, MINI, DS AUTOMOBILES, Lexus, Abarth, Alfa Romeo

We're excited to announce that, as of 1st July, we'll be powering the used car pages on @whatcar and its sister site, @autocar. https://t.co/H4GJLafkh7
We're excited to announce that, as of 1st July, we'll be powering the used car pages on @whatcar and its sister site, @autocar. https://t.co/H4GJLafkh7
What are the three big barriers to electric vehicle adoption and how can we as an industry help to overcome them? Find out in the latest edition of The Road to 2030 report 👉https://t.co/ho4cNqeUsQ https://t.co/qlA2IX6EiF
Are you getting the basics right? Find out in this week's tip of the week where @AndrewKorpela highlights the need to maintain your digital best practises. https://t.co/Rkm0nKu19B
One of the most recent entrants to the EV market, the @CUPRA Born, is currently seeing the most advert views of any new EV on our marketplace. With a new EV model set to enter the market every 10 days this year, what model do you think we'll see make the list? https://t.co/nOcF7YguLg
We've been working with manufacturers to get you access to the specification profile for each car and we're excited to announce that this is now available to retailers, helping you to make creating high-quality adverts easier than ever. Find out more 👇 https://t.co/lv2kLf4E77
After a slight technical glitch @therickw is live and sharing our latest market data. Demand has seen a decline but used car prices remain robust. https://t.co/lSNLB6rLrg
Over now to @MarcThornboroug who asks "is it time to reset your goals"? Last year's performance was incredibly strong across the market, being very much a seller's market. But in recent weeks we have seen it start to shift towards a buyers market. https://t.co/BVEiBdl9Dy
We're kicking off today's webinar with @marc_palmer. Right now the economy is the top issue for many people with the cost of living crisis in full swing and the spectre of a recession looming. But what does this mean for car sales? Read the thread to find out 👇 https://t.co/ZMErCURxJU

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