10:04 am, October 7, 2022
The used car market has so far remained stable in the face of the ongoing cost of living crisis, new data has shown.
Information collected by Auto Trader has found that levels of consumer demand have largely unaffected by recent turbulence with advert views on the platform actually rising by 17 per cent in September, compared to pre-pandemic levels.
Despite a slight five per cent softening of the levels seen immediately after the pandemic, average daily users actually increased to 1.34m last month.
The latest Auto Trader Retail Price Index found that the strong performance is helping to maintain strong used car prices, despite fears elsewhere that a crash could be around the corner.
According to the index, the average price of a used car increased 11.2 per cent to £17,409 in September on a year-on-year and like for like basis. It marks the 30th month of consecutive price growth.
Prices also rose on a month-on-month basis, up from £17,039 in August, to levels that are now ahead of typical seasonal trends.
As well as high prices, days to sell have also gone down to an average of 26 days – the fastest since October last year.
Reacting to the findings, Richard Walker, Auto Trader’s director of data and insights, said: ‘It seems almost every week the market is having to contend with another potential headwind, most recently the Chancellor’s not so mini budget.
‘As we’ve seen following other recent economic disruptors, some have been quick to suggest it’ll be the straw that breaks the camel’s back. However, we’re simply not seeing any sign of it, with levels of consumer demand, intent, and budgets all remaining stable.
‘To understand the current and future health of the market, it’s important to look beyond the headlines and assess the data for the true picture.
‘Whilst the used car market won’t be immune to these macro changes, including the potential impact of rising interest rates on finance deals, there are a range of factors unique to the automotive market, which we believe will continue to insulate it from broader economic disruption and continue to fuel sustained levels of demand, and with it strong used car prices.’
Buying a car remains a ‘fundamental need’
Auto Trader says it expects current levels of demand to be sustained as buying a car remains a ‘fundamental need for motorists’.
That means that despite buyers tightening their belts, they are still likely to splash out for a vehicle when they need one.
Research found that more than three quarters (77 per cent) of the 2,002 car buyers surveyed needed a car to get around, which is up from 71 per cent on pre-pandemic February 2020.
Combined with the huge backlog of around 500,000 of people waiting for a driving test, the circa 4m ‘lost’ new and used car sales since the start of the pandemic, and the current disruption in public transport, the used car market should be shielded from wider economic disruptors.
