Auto Trader has seen average used car prices grow for the 80th consecutive week as the boom in values showing little sign of ending.
Official figures released by the online marketplace, revealed that average prices rose by an incredible 26.9 per cent last week, when compared to the same time last year.
It marks the 80th consecutive week of price growth, and an almost four-fold increase in just six months, when growth stood at 6.8 per cent.
The average price of a used car has now reached £19,776 with demand remaining ‘exceptionally strong’.
Auto Trader has seen cross platform visits top 14m – a rise of 27 per cent on the same time two years ago.
There was also a 14 per cent rise in the hours (2.1m) consumers spent researching their next car on its marketplace.
The firm is expecting demand to remain high with over two in five consumers currently saying they intend to buy within two weeks.
The increased demand was also highlighted on Auto Trader’s Market Insight tool, which was up 14 per cent last week when compared to 2019.
Further evidence of this exceptional demand is the faster speed at which retailers are selling cars.
Last week it took an average of just 27 days for stock to leave forecourts.
Although it’s a slight slow-down on the October average of 24, which is a typical season trend, it’s 16 per cent faster than the speed of sale recorded in 2019 (32 days).
Another factor in the surge in prices is the ongoing drop in levels of supply, which were down eight per cent last week versus 2019.
The shortage of microchips and other raw materials which is directly and dramatically impacting worldwide supply of new cars is having a significant knock-on effect on the remarketing supply of used cars.
Record inflation having ‘minimal impact’ on buyers
It has been widely reported today that the interest rate in October reached 4.2 per cent – the highest figure in a decade.
Despite the worrying trend, Auto Trader’s consumer sentiment survey suggested a ‘minimal impact’ on buying intentions.
Out of circa 1,100 car buyers, 22 per cent said they intend to purchase within the next three months, whilst 43 per cent intend to do so within two weeks, up from 41 per cent in September.
What’s more, 31 per cent of those surveyed believe car ownership is more important today than it was pre-Covid, whilst 44 per cent feel more confident in their ability to afford their next car than they did a year ago.
Auto Trader is currently predicting that the market will record a total of circa 7.75m used car sales this year.
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Richard Walker, Auto Trader’s data and insights director, said: ‘To see such a huge increase in car prices in such a short period of time is truly remarkable and is indicative of the current perfect storm of exceptionally high levels of consumer demand coupled with very constrained new and used supply channels.
‘We’re also comparing against a period of national lockdown last year, which will further contribute to the high level of growth we’re seeing.
‘Although inflation will always pose a threat to demand, based on the positive consumer metrics we’re tracking across the retail market, as well as broader economic factors such as the record number of job vacancies reported just this week, we don’t anticipate any significant easing beyond normal seasonal trends.
‘Accordingly, with such strong levels of demand, and no end in sight for the current supply challenges, we can expect the strong year-on-year price growth to continue well into next year.’