9:07 am, December 1, 2022
The price of used cars on car dealer forecourts fell in November, according to the latest data from Auto Trader.
Following news from Cap HPI earlier this week that used car trade prices had dropped 1.2 per cent last month, Auto Trader says retail prices have followed suit, falling 0.4 per cent on October.
However, the marketplace stresses that there are ‘no signs of a correction’ and highlights the fact average used car prices are still up 45 per cent on their pre-pandemic levels.
Auto Trader takes its data from the prices of used cars advertised on its platform and says it assesses 900,000 prices every day.
Auto Trader says the 0.4 per cent dip in November is ‘normal’ and ‘expected at this time of year’.
Last week, the marketplace reported on a ‘snap’ look at used car prices which showed a £300 rise in prices, but that has now turned into a fall for the month as a whole.
Auto Trader also warned in its latest update that ‘demand has softened’.
‘As is typical for this time of year, there’s been a softening in levels of consumer demand,’ said Auto Trader.
‘However, whilst down two per cent on last year’s record levels, consumer engagement remains strong, with the volume of advert views up 11 per cent against the more “normal” trading conditions of 2019.’
Used car prices are still up on a year on year basis by 4.7 per cent, says the firm, with the average cost of a used car standing at £17,801.
Auto Trader’s Richard Walker said: ‘Despite the broader economic uncertainty, the ongoing year-on-year price growth supports our cautious, but confident, outlook for the used car market.
‘The evidence of our retail data should give retailers the confidence to buy knowing the robust trade margins still available, even during the typically quieter festive period.
‘The metrics we’re seeing are in line with what we would expect to see at this time of year, and although it would be easy to interpret the month-on-month softening as a sign of a looming crash in prices, we are not seeing any signs of this.
‘With levels of demand remaining robust, and no indication of a significant improvement in levels of supply anytime soon, we can expect used car prices to remain stable into the new year.’
Auto Trader’s comments follow those made to Car Dealer Live by Cap HPI’s valuations director Derren Martin earlier this week.
In the video, which you can watch above, he explains the fall his firm recorded in November was far better than expected.
Values traditionally drop in November and December before rising again in January as car dealers stock up for sales and the new year.
Mainstream media reports have prophesied a ‘used car price crash’ – but Martin told Car Dealer that isn’t coming.
‘From all the analysis we’ve got from our forecasts three to five years in the future, we don’t see that happening,’ he said.
However, Martin and his team are seeing the values of electric cars drop considerably as the price of energy rises.
‘On average, electric cars dropped 3.7 per cent in November compared to the 1.2 per cent fall across the market,’ said Martin.
‘Consumer demand for electric vehicles has dropped away.’
Auto Trader is also seeing electric car prices dropping with retail prices for EVs reducing by 2.5 per cent in November compared to October.
This was the third month in a row that Auto Trader had seen used EV prices fall.
