2:11 pm, May 3, 2023
Used car retail prices grew for the 37th month in a row in April as the market enjoyed its biggest boom in 18 months.
That is according to Auto Trader’s latest Retail Price Index, which has been studying the latest market trends for the fourth month of the year.
The firm’s analysis found that the average price of a used car rose to £17,843 in April, representing a 1.5 per cent month-on-month rise – the largest since November 2021.
Looking at the situation on a more long-term basis, the used car retail market has now grown for 37 consecutive months, although the rate of growth has been softening in the last year.
In April 2022, growth reached peak levels of 32.2 per cent but Auto Trader now places that figure at just 2.7 per cent.
Despite the slowdown, the data still contrasts with trade prices put forward by valuations firm Cap HPI at the end of April.
By using trade prices, rather than retail prices, to evaluate the state of the market, the outfit found that used cars declined by an average of £200 last month.
You can see a full breakdown of those findings here.
When it came to retail prices, Auto Trader found that stock issues remain a major concern for dealers, with supply down 8.9 per cent year-on-year.
Elsewhere, days-to-sell reached an average of 27 days compared to 26 in March.
Reacting to the findings, Auto Trader’s director of data and insight, Richard Walker, said: ‘The used car market has had a strong year so far, which is reflected in the record levels of consumer engagement on our marketplace over recent months.
‘Rising used car values has done little to dampen demand and based on what we are tracking across the market, there’s no indication of it slowing significantly anytime soon.’
Tumbling EV prices holding back growth
One of the biggest concerns for dealers in recent months has been the collapse in value of used EVs.
Last month, we reported how car supermarket group Car Planet are now refusing to stock used electric cars due to them being deemed ‘high risk’.
That followed similar sentiments being expressed by a panel of independent dealers at our Car Dealer Live conference in Gaydon.
However, since then Used Car Awards winner Robin Luscombe has bucked the trend and announced he is in the market for used electric stock.
Auto Trader’s data found that the issues surrounding used EVs have held the overall market back when it comes to growth.
The average price of a second-hand electric car on Auto Trader now stands at £31,517 – down 18.1 per cent on the previous year.
By contrast, the average price of a used petrol (£16,265) and diesel (£16,630) car grew by 4.8 and 3.3 per cent respectively.
Used EV prices have now fallen in every month of 2023, largely due to supply (up 246 per cent) massively outstripping demand, which grew by 33 per cent in April.
‘As we highlighted in our latest Road to 2030 report, the used EV market is in robust shape,’ added Walker.
‘The surge in supply means car buyers have an expanding range of affordable options, and the softening in prices is helping to make used electric an ever more attractive alternative.
‘Along with positive charging developments, not least ChargeUK’s newly announced £6bn investment in the UK’s charging infrastructure, and Arnold Clark’s planned national charging network, we’re seeing the traditional barriers to EV consideration being slowly but surely chipped away.’
