2:42 pm, October 4, 2023
Used car prices fell for the first time in almost three-and-a-half years last month, marking an end to a remarkable period for the motor trade.
Data collected as part of Auto Trader’s latest Retail Price Index found that the average price of a used car last month was £17,736.
The figure marked a 0.4 per cent dip on the same point last year – the first contraction since March 2020.
Despite the first fall in 41 months, Auto Trader’s experts do not expect an imminent crash in used car prices and say the figure is actually ‘concealing strong growth in many different segments’.
Last month saw older vehicles see their values soar, with vehicles aged between ten and 15 years-old growing by 9.8 per cent year-on-year. That was repeated in the 15+ market, which saw a hike of 6.1 per cent.
On the flip side, cars aged under 12 months old fell by 2.5 per cent and and those aged between one and three-years-old 1-3 dropped 6.7 per cent.
Auto Trader’s analysts have put the trend down to the easing of supply constraints, which has resulted in more second-hand cars enterring the market.
Richard Walker, Auto Trader’s director of data and insight, said: ‘The recovery in new car sales has brought a steady increase in supply to the used car market, and with it triggered the first overall price contraction in second-hand prices in over three years.
‘As is always the case with such a volatile used car market, context is key, and it’s critical not to be misled by the headlines.
‘For the vast majority of the market, we’re still seeing robust levels of price growth being stimulated by a combination of strong demand and constrained supply and so whilst the overall figures may continue to soften over the coming months, the market remains profitable.’
Used EV prices showing signs of stabilisation
Throughout this year, used EV prices have been in the headlines after repeatedly falling through the floor.
With supply far outstripping demand, prices have tumbled for over a year of month-on-month decline.However after 13 months of tumbling prices, values flatlined at £32,142 in September.
While the figure still represented a year-on-year drop of 22.1 per cent, it does at least represent slight slowing in the rate of contraction compared to August, which saw a 22.6 per cent decline.
Walker, says that despite recent struggles – and last month’s government u-turn on the 2030 ban – EVs are very much here to stay.
He added: ‘As prices stabilise and demand continues to accelerate, used electric vehicles are becoming a particular bright spot, and we’d urge retailers not to be distracted by the Prime Minister’s unexpected U-turn.
‘The ongoing de-fleeting of the hundreds of thousands of EVs sold over the last few years, as well as confirmation of the ZEV mandate means the volume of used electric cars entering the used market is only set to increase.
‘Ignore Westminster’s smoke-and-mirrors; EVs are here to stay and by following the data provide good profit potential.’
