Press release

Used car prices continue 'exceptional growth' but rate of growth shows signs of stabilising

According to the latest pricing data from Auto Trader, based on the circa 480,000 vehicles currently advertised on its marketplace, the rate of growth in used car prices is beginning to stabilise. Last week (9th – 15th November), the average retail price increased 8.3% year-on-year (YoY) on a like-for-like basis, which is a marginal fall from a peak of 8.5%, recorded a week earlier. However, the level of growth remains exceptionally strong, and last week marks the 28th week of consecutive price increases for used cars on Auto Trader.  

The strong rate of growth, albeit easing slightly on the previous week, is being driven largely by the imbalance of supply and demand in the market. To understand how these dynamics affect price movements, Auto Trader monitors both demand and supply to give a ‘market health’ calculation, which is available to all of its retailer partners for free via its Market Insight tool.

Despite thousands of forecourts across England having to close, and the tighter restrictions being felt across the UK, demand increased 21.1% YoY last week, whilst supply was down -9.1% YoY, leading to a 33.2% increase in market health. The very high level of demand in the market is further highlighted by the 12.9 million visits to the Auto Trader marketplace last week, which represents a 17.1% increase on the same period last year. 

Fuel types

Looking at the data on a more granular level, the average price of used diesel and petrol cars on Auto Trader followed a similar trend to the wider market, with their respective rates of price growth beginning to show signs of easing. Last week, the average price of a used diesel increased 9.4%, dropping slightly from the 9.6% peak recorded the prior week. Whilst demand for the fuel type dropped -2.3%, the levels of supply fell more sharply at -7.5%.  

In contrast, whilst the levels of demand for used petrol grew 4.9% YoY, it was outperformed by the levels of supply in the market, which increased 5.9%. However, the imbalance has had minimal impact on price growth, with the average price of a used petrol growing 8.4% last week, dropping slightly from the 8.7% recorded the prior week.

Body types

Last week, like-for-like prices continued to increase across all body types, with hatchbacks and estates recording the highest rate of growth, up 10.8% and 9.3% YoY respectively. However, SUVs remain the most in demand, increasing 10.1%, helping to fuel a 6.8% price growth. MPVs are recording the lowest rate of demand in the market, dropping -17.3% YoY, however prices remain stable, increasing 8.0% YoY.

Age brackets

Looking at the average weekly prices within age brackets, those used cars aged 10-15 years continue to be affected by low levels of supply, which last week was down -6.0% YoY, resulting in a 14.4% increase in prices, the highest rate recorded so far this month.

 Premium versus volume

In October both premium and volume brands recorded strong price growth as a result of demand outstripping supply in the market. The latest snapshot of cars available on Auto Trader reveals this performance has continued into November, with the average price of used premium and volume cars increasing 7.9% and 10.4% YoY respectively. However, similar to wider prices, both categories saw a marginal easing on previous weeks, with premium prices slowing from a peak of 8.1% the prior week, and volume down from 10.8% the prior week, and a peak of 11.4% recorded during the week of 5th October.    

Commenting, Auto Trader’s director of data and insight, Richard Walker, said: “As we’d expect from this time of year, there has been a gradual slowing of used car price growth on our marketplace over the last few weeks, but it’s important to remember this level of growth remains exceptionally high, and way above pre-COVID levels. The level of demand in the market is the biggest driver of price, and despite the national lockdown in England, we’re continuing to record a 17% YoY increase in visits, which underlines what little impact the tighter restrictions are having on consumer appetites.

 “Our research shows that over 50% of car buyers are happy to buy through click & collect and home delivery services. So, whilst forecourts may be closed for many, with such high demand and strong profit margins available, retailers should have confidence in the data and make the most of this opportunity.”

 Retailer pricing behaviour

Looking at how the restriction have impacted retailer pricing behaviour, the number of retailers making price changes and the value of their adjustments remain either lower than normal conditions, or at the lower end of typical pricing behaviour.

Last week there was an average of 2,204 retailers making daily price adjustments, which remains below the pre-lockdown average of 2,500 – 3,000. In total, 13,468 vehicles were repriced during the week, which is considerably lower than normal, which typically fluctuates between 17,500 and 24,000 vehicles.

In terms of the actual price reductions being made, pre-COVID-19 retailers typically lower sticker prices between £250-£550 per day. Last week the average price reduction was £325 which remains at the lower end, but an average of £43 more than the prior week.  

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
A quick summary of what we have covered in today's webinar from @ClarkRjoclark. https://t.co/QFgNQYhCR8
Prices then are still strong, but we are still seeing under-priced stock on our marketplace which means there is profit being left on the table. It's key then to monitor the live market prices and re-price to the live market value to avoid missing out on profit. https://t.co/3jGvyFVPIn

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