Press release

Volume brands see record annual price growth as premium price tags flatten out

  • Significant disparity between volume and premium brand price growth; 8% vs 1% in July
  • A positive July for diesel with record price growth and small increase in Auto Trader searches
  • Average price of used cars increases 7% in July

According to the latest figures from the Auto Trader Retail Price Index, there is a sharp disparity in the average price growth between used volume and premium brands, recording a contrasting year-on-year price increase in July of 8% and 1% respectively. This represents the highest rate of price growth for volume brands, and the lowest for premium since January 2017 (0%).

The data reveals that the gap emerged late last year. In August, both volume and premium brands recorded the same levels of sustained price growth (3%), but then began to separate, with volume continuing its trajectory, whilst the rate of growth for second-hand premium cars slowing significantly.

Commenting on the findings, Karolina Edwards-Smajda, Auto Trader’s Director of Commercial Products, said: “At this stage it’s unclear as to exactly why there’s such a contrasting pricing strategy between volume and premium brands, but it’s likely two key factors have coincided. For one, premium brands are competing more aggressively for market share and continue to develop sales at a healthy pace. And secondly, since Brexit and the impact on the value of the pound, we’ve seen volume brands less included to chase the market with lower margins. There’s clearly an emerging trend here and something we’ll keep a close eye on in the months to come.”

Average used vehicle prices increase in July

In terms of the wider market, used vehicle prices saw an increase in July, reaching £12,709; a like-for-like increase of 7% on the same period last year (stripping out the impact of changes in the mix of cars being sold[1]).

The average price of a used petrol car in July was £10, 844, an annual increase of 8%. It marks the fuel type’s lowest level of year-on-year growth since August 2017.

Despite wider challenges in the new car market, diesel recorded a particularly strong performance last month. The average price of a second-hand diesel in July was £14,411, which represented an annual increase of 6%, marking its highest ever rate of growth.

Diesel remains the UK’s most popular fuel type, albeit marginally

On average, 22% of all searches that take place on Auto Trader each month are based on fuel type. In June 2016, diesel accounted for 71% of searches and petrol just 27%. However, this figure has steadily declined in line with negative public commentary and by June 2018 reached a record low of just 47% of searches, whilst petrol had increased to 46%. In July, diesel managed to slow this trend, albeit marginally, creeping back up to 49% of all fuel related searches – it’s first increase since October 2017. However, petrol remains in hot pursuit, accounting for 47% of all fuel related searches last month.

The percentage of searches for alternatively fuelled vehicles (hybrid, bi-fuel, petrol ethanol, LPG, electric) remained flat in July, accounting for 4%.

Karolina continued: With new diesel registrations continuing to tumble, and the ongoing negative tone of the fuel debate, it’s very reassuring to see diesels performing so stoically in July in terms of both value and popularity on Auto Trader. We saw this reflected in the recent Q2 used car transactions which recorded a 3.2% increase in second-hand diesel purchases.

“However, whilst diesel is showing great resilience we cannot ignore the inevitable. AFV adoption remains disappointing but as the barriers to entry reduce and awareness amongst consumers increase, they’ll not only catch up with diesels, but will very quickly overtake them. There are clear signs this is already in effect and represents a very exciting opportunity for retailers. A diverse forecourt that accounts for all consumer tastes, including budget conscious car buyers and the more technologically savvy, will be essential to sustaining growth.”

The Auto Trader Retail Price Index combines and analyses data from c. 500,000 trade used car listings every day, as well as additional dealer forecourt and website data (OEM, fleet and leasing disposal prices, in addition to 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.

[1] Mix is determined by Society of Motor Manufacturers and Traders segment, age of vehicle and fuel type

Missed this week's webinar with special guest @vertumotors? Well fear not - the whole webinar is now available on demand at https://t.co/A8vB2i49FU https://t.co/fpMbEkaRgB
Driving long distances? Well the best car for the job is the @UKVolkswagen Golf which scooped the Best Car for Long Distances award at the Auto Trader New Car Awards 2020. Find out what owners said at https://t.co/TAtdeRojpZ https://t.co/4Sj9ANaFK6
For those looking for a 7 seater you can do no better than the @VolvoCarUK #XC90. That's according to the 181,000 car owners who voted it the best 7 seater in this year's Auto Trader New Car Awards! https://t.co/M7t1X3Ic9S https://t.co/csJOtcU63N
Exactly one week ago @MrRoryReid & @ErinBakerMotors announced the winners of the Auto Trader New Car Awards – revealing the best #newcars in the UK according to over 181,000 car owners! You can check out the #award winners at https://t.co/FMgf5HByCM #ThrowbackThursday https://t.co/CLdSORmOV0
Exactly one week ago when @MrRoryReid & @ErinBakerMotors announced the winners of the Auto Trader New Car Awards – revealing the best #newcars in the UK according to over 181,000 car owners! You can check out the #award winners at https://t.co/FMgf5HByCM #ThrowbackThursday https://t.co/SAFHIczDhl
#Dacia have done it once again! The @daciauk Duster once again won the Best Value New Car at the Auto Trader New Car Awards 2020 - an award they also took home in 2019! https://t.co/vf00Z0g60W https://t.co/rn5qZX59Gh
We've seen a record number of #newcar and van #leads with new car retailers enjoying a massive 91% monthly increase in leads! Discover the latest new car data and how to drive even more leads as we see demand continue to spike now > https://t.co/8l2Mkx0ldn
Big thanks to everyone who joined today's webinar and of course to our guest speaker @vertumotors!
Reminder that next week we'll be launching #ATHighlyRated! Retailers who met the criteria will be receiving a pack next week to promote their achievements to consumers. https://t.co/UJgS71ytoP
Over to @stuart_trader who reveals the result of our earlier poll - a majority discounting prices much less or maintaining pre-#covid19 approach https://t.co/t8PfkUzrtU

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