Used car prices remain well above pre-pandemic levels, with June seeing the 27th consecutive month of growth, Auto Trader has found.
The firm’s latest retail price index, based on analysis of around 900,000 vehicles, found that the average price of a used car increased by 23.7 per cent, year-on-year in June, to £17,252
Despite the price hike, Auto Trader says the market does show signs of softening, after a 28.4 per cent year-on-year increase was recorded in May.
That followed a rise of 32.2 per cent in April, which was the biggest increase ever recorded.
Overall, average used car prices have increased by £3,300 in the last two years, and a massive £4,500 in the last three.
Experts say the slowing down of price rises is down to a number of factors, including the impact of last year’s Covid lockdowns, which caused record levels of pent-up demand.
According to the latest onsite data from Auto Trader, demand remains robust, while dipping below the levels seen during the pandemic.
Advert views on the online marketplace are currently eight per cent down on the same point last year, but still up by more than 10 per cent of the pre-pandemic 2019.
The volume of used car enquiries being sent to retailers is also up a huge 67 per cent on June 2019.
Customers remain confident despite cost of living crisis
One of the biggest changes in the last year has been the ongoing cost-of-living crisis, which has caused huge financial strain.
Despite having the potential to impact on the motor trade, Auto Trader believes the market is currently enjoying good stability.
In a June survey held by the platform, three quarters of respondents stated they intend to make a car purchase in the next six months, consistent with levels over the last year.
Elsewhere, at least 80 per cent of consumers visiting the Auto Trader marketplace are at least as confident as they were last year in their ability to afford their next car, while 41 per cent said they were more confident.
Richard Walker, Auto Trader’s director of data and insights, said: ‘Although the huge growth in used car prices we’ve been tracking over the last few years may continue to soften over the coming months, there’s certainly no indication in current data that prices are set to tumble.
‘That’s because the same market dynamics that helped fuel the record acceleration in growth are still at play, albeit to a far less dramatic extent.
‘Despite the clear economic headwinds, we remain confident of continued consumer demand in the market, which coupled with ongoing supply challenges in both the new and used car market, prices will remain strong for the foreseeable future.’