1:30 pm, September 2, 2022
Auto Trader has moved to ease fears over an imminent crash in used car prices by announcing that values have risen for the 29th month in a row.
The firm’s monthly retail price index showed that average used car prices grew 15.6 per cent, year-on-year, in August to reach £17,039.
Prices also rose slightly on a month-on-month basis, increasing by 0.3 per cent from July to August. Auto Trader says the findings are consistent with typical seasonal patterns.
Experts have put the currently high levels of year-on-year growth down to current results overlapping last year’s exceptionally strong levels of growth.
According to the latest onsite data from Auto Trader, the volume of advert views on its marketplace dipped 11 per cent compared to the same point last year.
However, they remain up 16 per cent when compared to more ‘normal’ trading conditions of 2019 Auto Trader says therefore says that any suggestion of falling prices or faltering demand is simply a misinterpretation of the data and the changing market dynamics.
Public transport woes sustaining demand
Despite the current backdrop of economic uncertainty, Auto Trader remains confident that the current levels of demand in the market will be sustained, driven by a number of important factors, not least the huge backlog of around 500,000 people waiting for a driving test.
More broadly, demand will be fuelled by the fact cars are, for the vast majority of motorists, a fundamental need as opposed to a discretionary luxury.
This was highlighted in the latest Auto Trader research, which found that more than three quarters (77 per cent) of the 2,002 car buyers surveyed in July, needed a car to get around, which is up from 71 per cent in pre-pandemic February 2020.
The same research also revealed how the current disruption in public transport will help sustain demand, with half (50 per cent) of those surveyed saying that not being able to rely on public transport was a primary motivation to owning a car, which is up from a third (36 per cent) in February 2020.
This is further supported by Auto Trader’s onsite data, which revealed that 15 per cent of the visitors to its site surveyed in July, were looking to buy a car specifically to avoid public transport. This is the highest level recorded since Auto Trader began tracking it in July 2020.
Commenting on August’s performance, Richard Walker, Auto Trader’s director of data and insights, said: ‘We’ve seen a number of misleading comments recently suggesting that the market is in a steep decline, prices are on the verge of crashing, or consumer demand has plummeted, but these are either based on insufficient data or a simple misinterpretation. Similar predictions have been made since the very beginning of the pandemic, but as we’ve said throughout, the data simply doesn’t support any of this sensationalist speculation.
‘Although there are clear potential headwinds, consumer demand remains stable, and fuelled by the circa four million new and used car transactions lost since 2020, as well as a range of other macro-economic factors, we’re confident levels will be sustained. Coupled with ongoing supply challenges, these market dynamics will continue to keep prices strong for the foreseeable future.’
