7:54 am, July 7, 2022
The cost-of-living crisis is causing used car prices to soften as consumer demand also begins to fall, eBay Motors Group has said.
Data collected by the firm found that average prices and dealer stock levels both dipped in June as days to sell increased.
The outfit’s market view report revealed that the average advertised used car price dropped 1.4 per from £16,872 to £16,627 in the sixth month of the year.
That represented the fifth consecutive month of decline, although prices remain up on a year-on-year basis and are 20.3 per cent ahead of June 2021.
The drop was led by the independent dealer sector where prices were down 1.5 per cent to £14,496. Meanwhile, the average across franchised sites was down 0.6 per cent to £19,872 and car supermarkets down just 0.5 per cent to £16,802.
Stock levels dropped for the second successive month, down 2.4 per cent from 46.1 to 45 units, although the average was still nine per cent ahead of June 2021’s 41.3 units.
Car supermarkets bore the brunt of the shortage with inventories down 3.1 per cent from 293 to 284, while franchised dealers were down 5.4 per cent from 56 to 53. Independents remained unchanged at 36 units.
Average days to sell increased by nearly three full days from 36.7 to 39.5 days. The rise was led by franchised dealers up 14% from 31.2 to 35.6 days, followed by independents up three per cent from 45.3 to 46.5 days, while car supermarkets remained steady at 28.5 days, compared to 28.1 in May.
Lucy Tugby, head of marketing at eBay Motors Group, said: ‘June’s average £245 drop in advertised prices represents further evidence of them heading back to more normal levels as consumer demand eases.
‘We are seeing the impact that rising household costs is having on prospective buyers, supporting our recent Consumer Insight Panel research which found one in five car purchases are being delayed because of the cost-of-living crisis.
‘Reduced demand meant dealers took longer to sell cars from smaller inventories in June.
‘However, the average price of a used car is still tracking at over 20 per cent higher than last June, a difference of £2,804, so dealers holding firm on transaction prices are continuing to maximise on the opportunities available.’
Despite average prices softening in recent times, eBay Motor Group’s year-to-date analysis shows that they remain well ahead of 2021.
Advertised prices averaged £16,930 in Q2, a drop of 4.7 per cent on Q1 (£17,768) but still 22.1 per cent ahead of Q2 2021 (£13,868).
Prices for the first half of the year averaged £17,356, 20.8 per cent higher than the first six months of 2021.
Stock levels in Q2 averaged 46 units, the same as Q1, but five per cent higher than Q2 2021 (43.8 units). For the first six months of this year, stock levels averaged 46 units, compared to 47.5 in the same period in 2021.
Tugby added: ‘Although the first half of the year saw a general stabilisation in prices and days to sell, we recommend that dealers pay close attention to consumer needs as demand alters with the cost of living impact.
‘By remaining sharp on stock type, pricing and online visibility, savvy dealers will be able to roll with the incoming waves.’
