Average used car prices reached record levels again in January as market enjoys strong start to the year

9:13 am, February 4, 2022

Average used car prices reached yet another record in January as the market got off to a strong start to the year.

The latest Auto Trader retail price index found that listings had an average sticker price of £18,067 throughout last month.

It marks the 22nd consecutive month of price growth and represents a staggering 31.3 per cent increase from January 2021.

Auto Trader says the record-breaking growth is being fuelled by the unusually large gap between the levels of supply and demand in the market.

Despite a number of supply chain issues, including the continuing semiconductor crisis, consumer demand remains exceptionally high.

That is reflected in the huge number of used car enquires being sent to retailers through Auto Trader.

Last month, the volume of enquiries increased by nearly a third (31 per cent) on January 2021.

Due to the record pace at which used car prices are increasing, retailers who fail to keep track are at risk of losing crucial profits due to under-pricing their stock, say experts.

According to the Auto Trader data, in January alone, retailers on its marketplace missed out on around £125m in potential profit as a result of pricing below the current retail valuation – an average of over £11,000 per retailer.

Remarkably, the profit gap is widening, increasing from a potential profit loss of circa £93 million (circa £9,000 per retailer) in August 2021.

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Auto Trader’s data also found that more than one in five (21 per cent) of the nearly new cars currently available are more expensive than their brand-new equivalents and nearly half (46 per cent) are priced within five per cent of the RRP.

The firm puts the bizarre situation down to the fact car buyers unable or unwilling to wait for a brand-new car to become available – coupled with very low supply.

Despite this, nearly new cars were leaving forecourts 24 per cent faster in January 2022, than they were in January 2021 (an average of 41 days vs 54).

Commenting on January’s performance, Richard Walker, Auto Trader’s director of data and insights, said: ‘The January blues have done little to take the heat out of the used car market, which has started the year in a very strong position.

‘The ongoing squeeze on new and used car supply, combined with exceptionally strong consumer demand has ensured that the record price growth we saw last year has continued into 2022.

‘From what we’re tracking there’s little evidence to suggest that these very unusual market dynamics will change significantly any time soon.

‘Simple economics therefore point to a continuation of strong price growth well into the year ahead.’