Press release

Retail Price Index | May 2020

Used car prices and consumer demand continue upward trajectory as show rooms reopen

  • Used car prices record 1.9% growth year-on-year
  • Consumer demand surges as Auto Trader traffic peaks to 1.9 million daily visits
  • The number of leads sent to retailers increases 75% year-on-year

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 May was £13,931. It equates to a 1.9% year-on-year increase on a like-for-like basis and follows the 0.1% increase recorded in April: the first used price growth since July 2019.

The growth is contrary to what some commentators had predicted and reflects a market which has largely been paused during lockdown. Rather than slashing prices, Auto Trader’s data scientists have observed the number of car retailers making price changes, the number of vehicles being repriced, and the value of price adjustments made over the last 10 weeks has been significantly lower than normal trading conditions.  

Last week[1] a daily average of 1,135 retailers made price changes to their stock, which is 54% lower than the same period last year. On Monday 1st June, when retailers in England were finally able to reopen their showrooms, this increased, but only marginally, up to 1,381.  

In terms of the volume of cars being adjusted, last week an average of just 6,159 vehicles were re-priced every day which is down 60% year-on-year, and significantly lower than the 17,500 – 24,000 typically adjusted daily. On Monday, this increased to 6,379.  

In normal conditions, retailers adjusting their stock do so between £250 - £550 per day. Further pointing to a paused market, the average amount of the reduction last week was £178, and even on 1st June, this only increased to £214.

Last week, the number of leads being sent to retailers increased 75% year-on-year, and on 1st June, surged to 108% as consumers can’t just ‘turn up’ to a dealership without prior contact anymore. Looking specifically at new cars, the number of leads increased 111% on Monday from a record stock volume of over 50,000 physical new cars.

Commenting on these observations, Richard Walker, Auto Trader’s director of data and insights, said:

“Given the negative impact it could have had on the financial health of the market, it’s a huge relief to see that despite the huge pressure over the last 10 weeks, retailers have remained firm and resisted the urge to lower prices. And with consumer demand surging this week, it’s clear it was absolutely the right decision.   

“The reopening of showrooms in England this week marks an important first step on the industry’s road to recovery, but with trade auctions remaining closed, the challenge retailers currently face will not be selling cars, but rather restocking them. Such high levels of demand, coupled with a low level of supply, retailers can afford to continue holding firm. Retailers should be confident in their pricing and use accurate and up to the minute data, tools and insight to back up their pricing decision.”

On this week’s customer webinar, the retailer audience was asked whether they would be adjusting their prices once their showrooms had reopened. A resounding 72% said they’d be holding their prices.

ICE prices surge as AFVs continue downward trajectory

The increase in used car prices in May was driven by the strong performance recorded in the internal combustion engine (ICE) category, especially petrol, which continued its upward trajectory. At 3.3% year-on-year (£12,707), last month marked the highest rate of growth for petrol since March 2019. Diesel performed similarly well, increasing 0.9% (£14,736) year-on-year, which was its highest rate since April 2019 and the first-time monthly prices haven’t contracted since June 2019.

Although better than May (-2%), alternatively fuelled vehicles (AFV) continued to contract last month, recording a -1.5% year-on-year (£22,310) decline. Similarly, pure electric vehicles fared slightly better than in May (-3.2%), but at -3.1% (£25,886) down on the same period last year.   

-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.

[1] 23rd May – 30th May

According to our latest pricing snapshot, the strong growth in used car prices has continued into September. The average cost of a used car grew 7.4% YoY last week, marking 19 weeks of consecutive growth. Read the results in full here: https://t.co/TX88xlBOpU https://t.co/xEszb3JolF
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A perfect review score isn’t everything. Most buyers trust reviews more when they can see a mix of reviews along with how the retailer handled the customers feedback. Which begs the question, how much emphasis do you place on reviews and are you responding to each one? https://t.co/0OFqGVrEJb
Sourcing stock is one of the main challenges retailers face right now. That’s why it’s critical to be diversifying your stock profile – something that has been key to @DriveVauxhall managing to keep stock flow at normal levels through these challenging times! #atinsightoftheday https://t.co/CWBIOeCKDp
Be sure to register for our next webinar where Nathan Coe, CEO, Auto Trader will be speaking with @MarshallMotorGp. This is not one to be missed so register now - https://t.co/lWu984OeRI https://t.co/fnnG3OgNWM
Now it's over to @chrispenny222 who has announced he has man flu (not covid)! He's also hear to announce our new masterclass programme... https://t.co/NPyRXsRxWV
Huge thanks to Rob and @DriveVauxhall for joining our #webinar today. We'll be sharing the interview on our blog tomorrow so stay tuned!
Over to our interview with Robert Keenan, Managing Director of @DriveVauxhall - we've been looking forward to this one! https://t.co/OzSEigKg2J
Over to @MarcThornboroug for a few key updates! https://t.co/guf1A9dX1n
On to pricing now where we're seeing petrol and diesel prices up by 8% with #alternativefuel vehicles seeing a slight decline in prices.

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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