Auto Trader has revised its forecast of used car sales for 2021 to about eight million, thanks to what it says is record demand.
It also believes the second quarter will be the highest one ever for used car transactions, after seeing the rate of price growth double in three months.
Towards the end of 2020, Auto Trader had predicted used car sales would be in the region of 7.9m to 8.2m for 2021.
However, it told Car Dealer today (Aug 6) that that was based on there being no lockdowns. The revised forecast takes into account the lockdown during this year’s first quarter.
The latest results from the Auto Trader Retail Price Index, based on a daily analysis of some 900,000 vehicles, show that the average price of a used car in July 2021 was £14,781.
The online automotive marketplace said that was 14.1 per cent more year on year and the 16th consecutive month of used car price increases. What’s more, it was nearly double the 7.1 per cent increase registered in April.
Auto Trader said the steep trajectory had been fuelled by huge levels of consumer demand, reflected in increased traffic to its website.
Last month (July), it saw 67.5m cross-platform visits, which was 29 per cent more than July 2019, with people spending a total of 10.2m hours researching their next car on its website – a 22 per cent increase.
Auto Trader’s latest prediction flies in the face of what some others are saying about used car sales for the year.
Last week, Cox Automotive downgraded its 2021 forecast to 6,766,250 – a drop of 0.6 per cent, or 40,414 cars down, on its April forecast.
Auto Trader’s director of data and insight, Richard Walker, said today: ‘For the rate of price growth to double in just three months is really quite incredible and is testament to the exceptional levels of consumer demand in the market.
‘Based on what we’re seeing more broadly, such as the strong levels of disposable income and savings, as well as improving consumer confidence and low interest rates, we have every reason to believe that these levels have the potential to remain for much, if not all, of 2021.
‘What’s more, we have barely begun to scratch the surface in reclaiming the 1.4 million ‘‘lost’’ transactions in 2020 as a result of closed physical showrooms.
‘It’s for these reasons we feel very comfortable in revising our forecast for this year at a much higher rate than some commentators have suggested to circa eight million used transactions.’