9:54 am, June 6, 2023
Used car retail prices grew for the 38th month in a row in May as the market enjoyed its biggest boost in six months.
That is according to Auto Trader’s latest Retail Price Index, which has been studying the latest market trends for the fifth month of the year.
The firm’s analysis found that the average retail price of a used car rose to £17,815 in May, representing a 2.8 per cent year-on-year rise – the largest since December 2022.
However, despite the boom, potential retail growth is continuing to be help back by used EV prices, which fell 18.6 per cent last month.
The falling value of second-hand electric stock means that a three-year-old electric Jaguar I-Pace is now £600 cheaper than a traditionally fuelled F-Pace.
Meanwhile, tumbling Tesla prices since that start of the year mean that a used three-year-old Model 3 (£30,700) is now just £3,600 more expensive than a BMW 3 Series of the same age.
The data contrasts with information put forward by valuations experts Cap HPI this week, which found that Tesla prices appear to be back on the rise.
By using trade prices, rather than retail prices, to evaluate the state of the market, the outfit found both the Model 3 and Model X to be on a ‘hockey stick’ line as they plot upwards once again.
You can see a full breakdown of those findings here.
When it comes to retail prices, Auto Trader says consumer demand remains strong, with cross platform visits rising by 12 per cent (77.3m) in May,
However, levels of supply on the marketplace are down six per cent on the same period last year.
Experts say the imbalance is helping to keep prices stable and the market healthy. As a result, Auto Trader’s Market Health metric was up 12 per cent in May.
Reacting to the findings, Auto Trader’s director of data and insight, Richard Walker, said: ‘The health of the used car market remains extremely buoyant, as despite growing pressures on household finances, we continue to see car buying demand on our marketplace well ahead of last year’s levels.
‘With no imminent change to the current market dynamics, we can expect used car prices to stay strong for the foreseeable future, which should help retailers maintain robust margins.’
Used EV market showing signs of recovery
Despite retail prices continuing to fall for used EVs, Auto Trader says the seeds of recovery have began to be sewn.
Recent times have seen a the market flooded with stock as supply levels soared well above customer demand.
The latest data found that EV supply growth is now at its lowest levels since May, leading to hopes that demand could close the gap.
There are currently around 15,000 used EVs for sale each day on Auto Trader, 29 per cent of which is priced under £20,000.
The improved affordability has seen a rise in consumer demand, with the share of EV enquiries generated through Auto Trader for the one-to-five-year age range almost doubling over the last 12 months, from four per cent to 7.3 per cent.
Walker added: “Although prices are still falling, the rate of decline is beginning to show signs of stabilising as the levels of supply and demand start to improve. However, while the rate of supply entering the market is slowing, we’re going to continue to see very large volumes over the coming months.
‘By the end of this year, we can expect around a million electric vehicles on the road, and demand will need to keep pace.
‘The expanding range of affordable options should help encourage more people to make the switch.’
