Average price of used cars remains strong, despite slowing price growth
- Price growth of used cars is 0.1% - lowest since 2016
- AFVs driving price growth at 4.9% - EVs record 11.2% price increase
- Cars up to five years of age are bringing the used car price market down
With an average price of £12,763, used car price growth is almost neutral this month, at just 0.1% on last year - the lowest it’s been since Q3 2016 – according to the Auto Trader Retail Price Index. When looking at this data on a more granular level, it’s cars up to five years old which are responsible for slowing down overall growth.
Diesel price growth in reverse
Whilst the average price of a used car is only just increasing, the price growth for diesel is now in decline, at -0.5%, recording an average price of £14,123. Petrol remains in the black with 0.2% price growth and average prices remaining steady: £11,169.
EVs storming the market
While the figures for internal combustion engine (ICE) vehicles are crawling in growth, price growth for alternatively fuelled vehicles (AFVs) continue to grow apace with 4.9% year-on-year price growth and an average price of £21,759. Electric vehicles are driving the price growth with gusto at 11.2% and the average price continues to rise to unprecedented levels: £24,985 up from £23,771 last month.
Age is not just a number
Trends in the used car market are most notable when comparing ages. Cars up to five years of age have dropped to -0.4% price growth while those aged five years and older are balancing those figures, at 1.6%. Cars aged three to five years are particularly struggling at a decline of -0.6%. This is likely due to the increased number of cars in that age range; 2016 was a record year for the new car market causing significant overheating. Fleet cars will too have impacted these numbers, and as they return to retailers now, there’s higher supply and lower demand.
Karolina Edwards-Smajda, Director of Commercial Products at Auto Trader, comments: “Used car prices are trending towards a neutral rate, and it would not be surprising if we started to see negative figures. This is likely to be driven by several factors impacting consumers; Brexit and the ongoing confusion – not helped by the change in Prime Minister – and the mixed messaging around alternatively fuelled vehicles. It cannot be denied that over recent months we have continued to see price growth increase which is not sustainable. Right now, the demand isn’t as strong as we have seen previously but supply is and as such, prices have adjusted accordingly.”
Meanwhile, used cars which are around three years old with circa 60,000 miles on the clock have dropped by 8.9%. This is down to the seasonal trend; prices decrease in April, May and June following an influx of stock in the market driven by the plate change. This saturation in the market leads prices to decrease. Albeit the drop this month is more severe than we’ve seen previously.
The percentage of searches by fuel type is unchanged this month and continues to be dominated by petrol with 51%, diesels are at 41% and AFVs have 8% share of search. The most searched for used car this month is the BMW 3-Series, followed by the VW Golf, Mercedes E-Class, BWM 1-Series and Ford Focus.