11:18 am, March 20, 2023
Used car prices are showing no signs of slowing down despite plummeting used EV values acting as a dead weight, new data shows.
Auto Trader’s Retail Price Index shows second-hand car prices jumped by 0.7 per cent compared to February – the third consecutive month for price growth.
The price rise would have been larger if it had not been for plummeting used electric car values, said the firm.
Moreover, the average price of a used car listed on the marketplace in March was £17,720 – up 2.3 per cent year-on-year.
February saw a 1.3 per cent year-on-year increase, meaning the two months saw an acceleration in average used car asking prices.
It’s the first acceleration in the rate of year-on-year price growth in 10 months, said Auto Trader, having gradually slowed from the all-time high of 32.2 per cent year-on-year in April 2022.
The company said these rises ‘reflects the current health of the used car market, which has maintained momentum since the start of the new year’.
Auto Trader’s platform has also seen more traffic with visits up 20 per cent year-on-year so far in March, following a 19 per cent uplift in February, and 14 per cent in January.
The company said this growth in demand is translating into used car sales which are currently up around six per cent year-on-year in March.
Used cars took on average 28 days to sell in March – up on February’s 25 but matching March 2022.
Auto Trader’s director of data and insights, Richard Walker, said: ‘As soon as we came out of the quiet festive period, we saw signs of a used car market in very robust health.
‘The acceleration in the rate of price growth after 10 months of softening could not be a clearer barometer of the current market, which despite the wider economic and political backdrop, is going from strength to strength this year.
‘Although growth rates may begin to soften again, with no immediate change expected in the current supply and demand dynamics, anyone predicting a fall in used car prices anytime soon will be disappointed.’
Falling EV prices ‘holding back’ overall price growths
Auto Trader said March’s price growth was being ‘held back’ by the ongoing contraction of used EVs.
Values of used electrics are down by 13 per cent compared to March 2022.
By comparison, prices of used petrols and diesels are up 4.3 and 2.4 per cent respectively.
Oversupply is the root cause and not falling consumer interest, said Auto Trader, with stocks of models like the Nissan Leaf rising by a massive 313 per cent since August 2022.
Walker added: ‘Despite some of the recent reports, it’s clear that consumer demand for EVs remains very robust, so it’s important that we correct the myth that consumers don’t want them and that they don’t work.
‘With the sub-five-year-old EV parc expected to grow 62 per cent this year, we’ll need to work together as an industry to change the narrative and we need to change it fast to avoid more than just a pothole on the road to 2030.
‘Encouraging car buyers into used EVs through incentives, marketing and information to demystify them will be critical.’
