Average used car prices jumped by seven per cent in April year-on-year thanks to surging levels of demand, new data shows.
Auto Trader’s Retail Price Index shows the average price of a used car in April was £14,124 – a year-on-year and like-for-like increase of 7.1 per cent.
April was also the thirteenth consecutive month of price growth, and marked the second month the rate of growth has accelerated, increasing from the seven per cent and 6.6 per cent recorded in March and February respectively.
The company says this acceleration has been fuelled by surging levels of demand in the market.
Demand increased by 36 per cent on April 2019, boosted by showrooms reopening. Traffic also increased on Auto Trader – 69.3 million cross platform visits, up 36 per cent.
As revealed by Car Dealer earlier this week – in the video you can watch below – Auto Trader expects dealers to increase prices in the coming months.
This new data, published today, shows that’s already started to happen.
Auto Trader found that of the daily average of 2,316 dealers who adjusted their prices last month, more than one in five (22 per cent) made an overall price increase across all stock on their forecourts.
The firm says this is up significantly on the 16 per cent who made increases in March and the 15 per cent in February.
The trend to push up prices has accelerated even further into May, with now more than one in four (27 per cent) of the retailers amending prices, adjusting upwards.
Commenting on the data, Auto Trader’s director of data and insight, Richard Walker, said: ‘The levels of demand in the market increased significantly last month, resulting in the already very strong price growth accelerating even further.
‘Whilst there are some concerns over current trade prices, this exceptional growth should give retailers confidence to buy knowing the positive trading margins available.
‘It’s more important than ever to adopt a “retail back” approach to pricing, because trade valuations simply cannot keep pace with the speed of change and do not truly reflect the live market.
‘Encouragingly, wider economic factors suggest that these high levels of car buying demand are set to continue for some time.
‘If that’s the case, we’ll need to see supply improve substantially from today’s levels before that dents either the price growth we’re tracking, or the margin opportunities seen by retailers.’
Demand for ICEs and EVs surges
Auto Trader’s data also extended to fuel types with both increased demand for ICE and electric powered vehicles.
Used volume EVs are increasing from an already significant 132 per cent year-on-year YoY in March 2021 to 242 per cent in April, outstripping the 84 per cent growth in supply levels.
As a result of this imbalance in supply and demand, prices increased 8.2 per cent (£20,364).
However, for premium EVs, thanks to robust levels of supply, average prices contracted in April by four per cent year-on-year (£43,011).
In contrast, the traditionally fuelled counterparts saw levels of supply fall last month, with the number of used diesel and petrol cars in the market dropping 24 per cent and 12 per cent year-on-year respectively.
It’s the first time the levels of supply of petrol has contracted since October 2020.
However, consumer demand remains very strong for both fuel types, increasing 62 per cent and 60 per cent respectively.
As a result, the average price of a used diesel grew by more than the average increase across all cars and was up 9.2 per cent year-on-year (£14,804) last month, whilst petrol prices grew 5.8 per cent (£12,627).