12:01 pm, February 23, 2023
While used car prices in the US have fallen steeply over the past year, car dealers in the UK shouldn’t expect to see a similar trend anytime soon.
That’s the view of Auto Trader which believes, if anything, the UK’s used car market is strengthening with prices remaining high and strong demand from buyers so far in 2023.
The second-hand car market in the States saw prices crashing last year.
Rising interest rates and improved availability of new vehicles pushed prices of used ones down.
December 2022 saw prices crash by 14.9 per cent compared to the same month the year before – the largest drop since the 1990s.
Figures show prices have picked up slightly in early 2023, but the US used car market remains very volatile.
UK car dealers shouldn’t expect to see such similar price movements in 2023, though.
Speaking on Car Dealer Live, Auto Trader head of strategy Jon Davies said: ‘We need to be careful not to assume that what’s happening there [the US] is going to flow across the pond.
‘What’s been happening in the US, UK and a lot of other markets is similar enough to make comparisons. But when you look under the skin the US is very different from the UK.
‘New car registrations here have been down by around 32-33 per cent versus where they were before the pandemic, and that’s been more than most markets globally, particularly when compared with Western Europe, but especially when compared with the US which has been down by around 12, 13 or even 18 per cent each year.’
Davies added: ‘The US has seen a lot more cars go into the market and they’ve seen a lot more volatile pricing where prices shot up (a lot quicker than they did here), then came down, then shot up and in the past 12 months the market has remained negative.
‘Our supply constraints, if anything, have really helped that pricing landscape because demand has remained okay. The glide path has been a lot more even and consistent.
‘A metric we look at is days in stock – in the UK it has remained strong while in the US this has been lengthening month on month since about mid-2021.’
Latest Auto Trader data shows average days in stock stood at 25 days in February – in January the figure was 40 days.
In a wide ranging interview Davies also buried deeper into demand seen in February, Auto Trader’s view on falling used car transactions in 2022, the ongoing slump in EV prices and why there’s been an increase in used car finance business.
Click the video at the top of this story to watch the full interview
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