Used car prices continue upward trajectory into August with 15 weeks of consecutive growth
Strong growth in average used car prices has continued into August based on data observations from the circa 12,500 retailers currently advertising on the Auto Trader marketplace. On a like-for-like basis, last week (w/c 10th August) saw a 6.2% price increase on the same period last year, which represents 15 weeks of consecutive price growth.
Fuel types
As highlighted in July’s data, this growth is being driven by the strong performance of internal combustion engine (ICE) vehicles, a result of the high demand and lower supply in the market. Last week petrol vehicles saw a like-for-like price increase of 6.9%, whilst diesel prices were up 6.3% year-on-year. It marked consecutive price growth of 24 weeks and 13 weeks respectively.
Supply and demand dynamics impacted low emission cars too, but in reverse to their ICE counterparts, with supply exceeding demand, last week saw the 20th week of price contraction for alternatively fuelled vehicles (AFV), recording an average price fall of -1.2%.
Age brackets
Looking at the average weekly prices within age brackets, those used cars aged 10-15 years have seen the largest growth so far this month, recording a year-on-year increase of 10.3% last week. It was followed by 5-10-year-old cars, which were up 9.1% on the same period last year.
Premium versus volume
In July both premium and volume brands recorded a 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 August, with the average price of used premium and volume cars increasing 4.3% and 10% respectively.
The price performance recorded in August has been driven, in part, by strong demand, as highlighted by the record number of daily visits to Auto Trader’s marketplace. During the week of 10th – 16th August, there was an average of 2.1 million visits each day across its platforms, which is a 26% increase on the same period last year. Auto Trader’s research[1] support this; out of 58,461 Auto Trader users surveyed in July, nearly a quarter (24%) intended to buy a new or used car within the next three months and 30% within the next six.
Commenting on the results, Auto Trader’s director of data and insight, Richard Walker, said: “It’s encouraging to see that over two and a half months after forecourts were permitted to reopen, and with stock levels slowly returning to normal, prices have continued to climb. This is a result of the surge in consumer demand which shows no sign of slowing in August. While the majority of auction houses are yet to open their auction halls, online channels are close to pre-COVID-19 capacity levels, which has seen the supply challenges many retailers faced after lockdown easing in recent weeks.
“We’re hearing concerns over the impact economic uncertainty and the end of the government’s furlough scheme may have on the market. However, based on the exceptionally strong consumer metrics we’re observing on our marketplace, we’re confident that used car sales and prices will remain buoyant in the coming weeks.”
Retailer pricing behaviour
Whilst the number of retailers making price changes and the value of their price adjustments has begun to increase since the end of the lockdown restrictions, they remain significantly lower than pre-COVID-19 levels. Last week, the average number of retailers making daily price changes was 2,000; 17% fewer than the same week last year. The average amount being changed on a daily basis was £274. Under normal trading conditions, reductions average between £250-£550 per day.
-ENDS-
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% consumer prompted brand awareness and attracts circa 50 million monthly cross platform visits each month, with over 80% of visits coming through mobile devices.
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For all media enquiries, please contact:
Andrew Nankervis | Andrew.nankervis@autotrader.co.uk
[1] On site survey conducted 1st – 26th July 2020
