Auto Trader director Richard Walker has warned that dealers need to stay on top of prices as the market values shift rapidly, not just for new stock.
Average used car prices were up 8.1 per cent year-on-year on Auto Trader in May, making it the 14th consecutive month of growth.
This was turbocharged in the last two weeks of the month. Average prices went from 7.1 per cent to 7.3 per cent up year-on-year in the first half of May and then jumped to 8.1 per cent in the final week.
However, dealers were repricing less vehicles in May, down 12 per cent from April to 12,038. Of those, 32 per cent increased prices, which is also up from 22 per cent in April and 15 per cent in February.
During the middle of May, the direction of daily adjustments being made shifted positively, with retailers increasing their prices by an average of £31 and by the final week, by £41.
In contrast, during the final two weeks of May 2019, retailers were dropping their prices by an average of -£325 and -£336 respectively.
Further to this, fewer dealerships were making price adjustments, down by 111 to an average of 2,205.
Walker, director of data and insight at Auto Trader, said: ‘The significant acceleration in retail prices we’re seeing across the market is unprecedented and shows no signs of slowing.
‘It is critical that retailers are reacting to the speed in which the market is moving, which means ensuring the whole forecourt is adjusted to market price, and not just new stock.
‘On Auto Trader, we’re seeing a significant proportion of older advertised stock which is yet to be repriced to reflect the positive movement of the market, which is not only limiting potential margins, but also dragging down consumer-facing valuations which are based on all advertised vehicles on site.’
Supply in the month dropped by 18 per cent while consumer demand is up 36 per cent, creating further imbalance in the market.
This was also seen in the number of visitors to Auto Trader, hitting a new record of 73m cross platform visits, compared to the previous record of £69.3m in March.
That puts the total monthly figure up 39 per cent compared to a pre-pandemic May 2019 and six per cent up on April 2021.
Unsurprisingly, this surge in demand also resulted in days to sell dropping to an average of 23 compared to 29 in April and 34 in May 2019.