7:00 am, January 9, 2024
Auto Trader says the used car market is on a ‘firm footing’ heading into 2024, despite a difficult end to the previous year.
The firm’s monthly Retail Price Index has found that used car prices fell 5.6% year-on-year in December to £17,064.
That result was also slightly down on November’s figure of £17,319 but experts insist there are reasons for used car dealers to be positive.
The firm’s analysts found that consumer demand on the platform remained robust throughout December, up 11.7% on December 2022 – the strongest pace of growth since July.
Overall used car transactions also increased by 4% in the final month of the year, leading Auto Trader to increase its Market Health metric from 6% in November to 10.6% in December.
The early signs in January have suggested more good news, with the number of visits to the site up nearly 4% during the first week of 2024.
That follows a total of over 67m cross platform visits in December – a year-on-year rise of 10.2%.
Elsewhere, used cars continued to sell quickly, taking an average of just 36 days in December.
The figures come after Car Dealer reported last week that AA Cars had found that the most popular used cars lost significant value in final months of 2023.
Meanwhile, when it came to trade prices, Cap HPI found that used car prices tumbled again in December – but will begin to stabilise in 2024.
Commenting on the latest findings, Auto Trader’s director of data and insights, Richard Walker, said: ‘Our data clearly shows that the fundamentals of the used car market remain solid; consumer demand is robust, and cars are selling quickly, which combined with the slow return in supply, means retail prices continue to show more resilience than their trade counterparts.
‘Worryingly, it appears some pricing strategies are being guided by wholesale trends, placing unnecessary pressure on retail values, and risking profits in the process.
‘Rather than just a cause for concern, the retail and wholesale markets being out of sync also presents a profit opportunity for retailers who analyse the data on a car-by-car basis and price stock relative to retail valuations.
‘This year more than ever, its crucial retailers adopt a forensic-like approach to their pricing strategies.’
December marked the fourth consecutive month of year-on-year decline for retail prices but Auto Trader has called for dealers to view the figures with ‘nuance’.
Used cars more than 10-year-old still showed positive price growth, with 10–15-year-old vehicles up 5.3% year-on-year to £6,532 and 15+ vehicles rising 2.5% to £5,516. Cars aged 3-5 years old slid 6.1% to £19,639.
Among fuel types, the average cost of a used EV was down 22.7% to £29,718 – continuing the trend of much larger falls than petrol (down 3.8% to £15,482 YoY) and diesel (falling 2.2% to £15,371).
