11:40 am, December 4, 2023
Auto Trader has reported another fall in used car prices with values plummeting for the third month in a row.
The firm has today (Dec 4) published its monthly Retail Price Index, which shows that the average price of a used car on its platform stood at £17,319 in November.
Auto Trader said used car prices advertised on its platform fell 2.5% in November, compared to October.
Compared to November last year, used car prices are down 3.8% and they have now fallen every month since August.
The result flies in the face of data published earlier today by Motors, which found that prices on its platform largely stayed at the same level in November.
One area where the two firms did agree was a rise in customer demand for older cars, as the cost of living crisis continues to impact buyer behaviour.
Auto Trader’s data found that vehicles aged above five-years-old were up 1.3 per cent year-on-year last month, whilst those aged over ten years-old increased by 6.8 per cent.
On the other side of the coin, cars aged below five-years old saw their average price fall by six per cent, due to a combination of increased supply and increased pressure from new-car deals.
The increased demand for older cars worked to the advantage of independent dealers, who saw their performance rise by 5.1 per cent last month. Over the same period, franchise dealers declined by 0.6 per cent.
EVs struggle in ‘nuanced’ market
Auto Trader’s experts say that despite the overall decline in prices, the used car market remains ‘nuanced’ with different sectors faring better than others.
The average price of low emission vehicles was down 11.9 per cent against November 2022, while EVs in isolation, fell by a whopping 21.1 per cent.
On the flip side, traditionally fuelled cars softened just 1.8 per cent year-on-year.
It was a similar picture when it came to brands as well. Whilst premium and super premium cars dropped 6.5 per and 3.6 per cent respectively, the average retail price of volume brands contracted just by just 2.1 per cent.
At an even more granular level, prices of petrol and diesel volume brand cars increased last month, rising 0.6 per and 0.4 per cent respectively.
Commenting on the findings, Auto Trader’s director of data and insights, Richard Walker, said: ‘As we’ve been reporting for some months now, retail prices remain robust across segments of the market, demand is increasing, and cars are selling quickly.
‘I’d urge retailers therefore, not to give up potential opportunities based on trade data alone, which only show one side of the story.
‘Car buyers aren’t aware of wholesale trends and are prepared to pay what they think is a fair price based on the retail market value, not what a retailer paid it for.
‘With trade and retail prices no longer in sync, there’s an opportunity for retailers if they use a complete view of the market to guide their decisions.
Every car has a retail price at which it will sell, so retailers should take a vehicle-by-vehicle approach and use the right metrics to spot the most profitable stock for their forecourts. More than ever, the opportunities are in the detail.’
