12:45 pm, August 2, 2024
Used car retail prices remained stable in July as a result of ‘strong underlying health’ in the market.
That is according to Auto Trader, which has today published its monthly retail price index.
The firm found that prices stayed exactly on par with June, with the average used car costing £16,419 in the seventh month of the year.
That figure represents a decrease of 9.8% on the same point last year but experts said demand remained strong.
It comes after valuations firm Cap HPI told car dealers that prices in the trade sector fell by 0.4% last month.
Auto Trader’s data, which is based on around 800,000 daily pricing observations, found that demand is continuing outpacing supply.
Cars aged between 1-3 years grew in price by 0.4% last month, while vehicles aged between 3-5 and 5-10 saw prices increase by 0.2% and 0.1% respectively.
The data also suggested a tricky spell for dealers when it comes to getting their hands on stock, with the volume of available stock contracting 5%year-on-year – the fourth consecutive month of decline, and the steepest fall since the same period last year.
However, retailers were met with high levels of consumer demand. Despite disruption caused by the General Election, the Euros and Wimbledon last month, demand levels on Auto Trader rose by 3.5%, compared to last July.
The firm ended the month with around 80.9m visits to its platform – up 2.1% on July 2023 and 19% on July 2022.
As a result of the increased demand, July saw used cars selling a day quicker than June, at an average of 29 days.
When broken down by age, 3-5-year-old cars left forecourts in just 27 days, while cars aged below 12 months and those aged 10-15-years took longer to sell, lingering on forecourts for 32 and 34 days respectively.
Auto Trader also issued a warning to retailers who are underselling their stock, with experts finding that around 8,900 retailers are currently advertising around 63,000 cars with a high Retail Rating score below their market average.
The firm estimates that the trend is currently costing retailers around £31m.
Commenting on the findings, Richard Walker, Auto Trader’s data & insights director, said: ‘We continue to see a complex and nuanced used car market, but the underlying fundamentals remain robust, which means cars are selling quickly and more are being sold.
‘With demand continuing to outpace supply, prices should continue to stabilise over the coming months, slowly rising in line with seasonal norms.
‘Critically, there’s no sign of a drop in either consumer demand or confidence, which will be further boosted by yesterday’s cut in interest rates that will build on the economic benefits of increased political stability.
‘There’s room for optimism then as we look ahead and it’s why we’re confident in predicting a 5% rise in transactions by the end of the year. As always, a combination of insight and instinct will be key to maximising the opportunities.’
