6:05 am, January 8, 2023
The used car market has entered 2023 in a ‘robust’ position after a stable December, Auto Trader has told dealers.
The firm’s retail price index found that the average price of a used car rose 3.4 per cent compared to December 2021 to reach £18,030 in the final month of 2022.
That rate of growth is down on record highs seen earlier in the year but remains steady, allaying fears of a crash in response to cost-of-living concerns.
For the year as a whole, the average price of a used car stood at £17,548 in 2022 – a huge rise on the 2021’s £15,204.
In December and November, Auto Trader reported the traditional seasonal decline, with prices dipping 0.4 per cent in December compared to the previous month.
However, despite a softening in consumer demand, interest remains robust and well ahead of pre-pandemic levels.
This is reflected on by the fact Auto Trader saw a significant spike in visits to its marketplace in December, increasing by around 10 per cent to nearly 61m visits.
Elsewhere, the firm’s data showed that used cars took an average of 29 days to sell in December, which is the fastest December since the start of the pandemic.
The fastest selling used car in 2022 was the Toyota Yaris Cross, which took an average of just 16 days for dealers to shift.
‘Market on firm footing for year ahead’
With several fears about what the year could hold for the economy, Auto Trader’s findings offer a ‘reassuring and stable outlook’ for the used car market.
The firm says that even if consumer demand softens, the market should be shielded from the full impact of the deepening cost of living crisis.
Experts put this down to several key factors, including that, for most, owning a car remains a fundamental need.
Stable levels of consumer demand and ongoing constraint in supply are also likely to ensure used car prices remain strong well into 2023. In turn, strong prices will continue to help maintain healthy profit margins.
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Commenting on the data, Auto Trader’s Director of Data and Insight, Richard Walker, said: ‘In response to the barrage of negative newspaper headlines, one would be forgiven for predicting the worse for this year.
‘But against a backdrop of political and economic turbulence, used car prices, and the market more broadly, has remained stable, which means we’re starting 2023 in a robust position.
‘Whilst the market won’t be immune to financial instability, there’s a range of factors unique to the automotive sector which should insulate it from some of the more extreme economic disruption predicted for 2023.
‘This gives us a cautious but confident outlook for the year ahead.’
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