October saw the 19th consecutive month of growth in used car prices, increasing by a record 25.6 per cent on a year-on-year and like-for-like basis.
That’s according to figures released today (Nov 5) by Auto Trader, which said the average price of a second-hand car had risen by nearly £3,000 in just five months, soaring from £13,973 in May to £16,878 in October.
It pointed out that the used car market was so strong at the moment that nearly one in four (22.2 per cent) of nearly-new cars available – those aged up to 12 months – were currently more expensive than their new equivalents.
The previous all-time high was 17 per cent recorded in September, and the latest percentage growth is nearly six times that of January’s four per cent.
The latest results from its Retail Price Index are based on a daily pricing analysis of some 900,000 vehicles.
Auto Trader said the growth was continuing to be driven by unique market dynamics – particularly the exceptionally high levels of consumer demand.
It said traffic to Auto Trader was up by 30 per cent (64.6m cross-platform visits) last month versus October 2019.
The time that people spent on researching their next car on the marketplace also rose – up 18.8 per cent, which equated to a total of 9.9m hours.
Based on the average number of days to sell, cars were shifting 11 per cent faster last month versus two years ago as well – 24 days versus 27.
Ongoing new and used car supply challenges were also causing prices to grow, with supply down 12.2 per cent last month against October 2019.
And although there may be some slight softening, the likely continuation of high demand and low supply will keep used car prices on a similar trajectory into next year, said Auto Trader.
Director of data and insights Richard Walker said: ‘What we’re currently seeing in the market is the result of basic economics – exceptionally strong consumer demand and a constrained supply chain which simply cannot catch up.
‘Looking ahead, demand will continue to be fuelled by healthy levels of consumer confidence, a positive shift towards car ownership, and the 1.5 million ‘‘lost’’ car sales in 2020.
‘Add the fact it’s unlikely we’ll see a strong return on supply levels due to the fall in new car sales volumes over recent years and the lower levels of pre-registration, and we can expect strong year-on-year price growth to continue well into next year.’
Consumer demand for petrol and diesel vehicles rose by 7.2 per cent and 1.7 per cent respectively.
The £15,620 average price of a petrol car in October was 26.2 per cent up year on year, while the price of a diesel car – £16,880 – grew by 26.7 per cent.
EVs’ rising popularity continued into October, and with demand outstripping supply across both volume and premium brands, prices rose by 20.7 per cent (to £25,271) and 3.8 per cent (to £47,001) respectively.
Earlier this week, Auto Trader chief executive Nathan Coe chatted exclusively to Car Dealer about used car prices. You can watch his interview by James Baggott below: