11:30 am, March 3, 2023
Used car prices grew for the 35th month in a row in February, new data has revealed.
Auto Trader’s Retail Price Index found that the average retail value of a used car grew by 1.3 per cent year-on-year in February to reach £17,654.
The figure is down on the 32 per cent growth seen in February 2022 but continues to highlight the strong values used cars currently hold.
The average cost of buying a used car has now risen by a whopping £4,000 since the start of the pandemic, Auto Trader reports.
February also marked a 0.3 per cent month-on-month increase, when the average retail price figure stood at £18,119.
Richard Walker, director of data and insight at Auto Trader, said: ‘The strong level of demand in the market, coupled with the ongoing shortfall in stock fuelled by the dearth in new car supply, is keeping second-hand car prices stable and supporting a healthy and profitable used car market.
‘With no indication of these dynamics shifting anytime soon, we remain confident for the months ahead.’
New cars values also on the rise
As well as sky-high prices for used vehicles, Auto Trader’s data also revealed a significant increase in new car recommended retail prices (RRP).
In just five years, average RRPs have risen a whopping 43 per cent, from an average of £27,305 in January 2018, to £39,038 in January 2023.
Over the course of the pandemic, RRPs rose risen 22 per cent and in the last year alone have shot up by a further nine per cent.
Experts also found that new car volumes rose 31 per cent in February as the global semiconductor crisis continues to ease. However, new car stock available to buy in the UK remains around 60 per cent below the record levels recorded in early 2021.
In addition to changing supply levels, analysts found a drastic shifts in the most popular types of cars sold in the UK.
Since January 2018, SUVs have nearly doubled their marker share, increasing from 21 per cent of all new cars to buy in January 2018, to 41 per cent in January 2023.
In terms of fuel types, in January 2018 diesel accounted for 46 per cent of the total number of brand-new cars available to to buy, but today its shrunk to just 17 per cent.
Conversely, the proportion of the more expensive electric cars has increased from one per cent to 12 per cent, whilst petrol hybrids have grown from two per cent to 14 per cent..
Walker added: ‘Given higher prices, lower discounts, and increased borrowing rates, retail demand for new cars softened during the closing months of last year.
‘Reassuringly, however, along with the very positive momentum we’re tracking in the used car market, we’re seeing new car demand begin to pick back up.
‘Despite the broader economic headwinds, we fully expect any increase in new car supply over the coming months will be met with healthy levels of consumer appetite.
‘As we have consistently seen over the last few years, where there’s stock, there’s sales.’
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