Used car prices rose for the 40th month on the spin in July but growth did begin to slow compared to previous levels.
That is according to Auto Trader, which has revealed its latest Retail Price Index, analysing trends across the used car market.
The data found that prices rose 2.4 per cent year-on-year last month, reaching an average of £17,920.
While the average retail price was up on the £17,756 reported in June’s statistics, year-on-year growth took a dip from last month’s 3.2 per cent.
The figures mean that the average second-hand car now costs more than £4,000 more than it did in April 2020, which was the first full month of lockdown.
The data is based on around 800,000 daily pricing observations on Auto Trader’s retail platform and contrasts with recent findings from valuations firm Cap HPI.
By using trade prices, rather than retail ones, the outfit found that used car values fell by 1.9 per cent last month –the biggest fall of the year so far.
However, the company’s director of valuations, Derren Martin, was quick to ease dealers’ concerns of an upcoming price crash.
You can hear his full conversation with Car Dealer here.
Back in the retail sector, Auto Trader says the second-hand market continues to benefit from the limited supply and high demand.
Compared to 12 months earlier, the supply of used cars was down 1.5 per cent in July and demand up 11.5 per cent.
The increased demand was highlighted by the fact that average days-to-sell fell from 30 to 28 days in the second quarter of 2023.
Auto Trader also recorded an impressive 79.2m visits in July, up 16.8 per cent against the same month last year.
Reacting to the findings, Richard Walker, Auto Trader’s director of data and insight, said: ‘Despite the doubters, pricing in the used car market continued its long run of growth in July, albeit at a slightly slower pace.
‘The current dynamics of the market, with robust customer demand and lower supply levels than historical standards, means we don’t see any signs of this slowing in the data.
‘We do see used car supply continuing to improve and with concerns over the current health of the economy and the eventual effect of interest rate rises, we continue to track the data closely.
‘Based on what we’re seeing in the data into August, we remain confident over the health of the market for the coming month.’
EVs continue to buck market trends as prices come tumbling down
While demand continues to outstrip supply in the used car market as a whole, one sector where the opposite is true is in EVs.
Supply of used electric vehicles rose by a whopping 173.6 per cent in July with demand failing to keep up with those levels.
As a result, the average retail value of used EVs fell by 21.3 per cent to £31,568 last month – the a seventh consecutive month of year-on-year decline.
Since their peak in July last year (£40,728) prices have dropped more than £9,000. In contrast, used petrol prices have risen by 4.7 per cent in the same period and used diesel prices by 4.9 per cent.
Earlier this year, we reported that supermarket group Car Planet is no longer buying 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 in March.
You can read Miller’s guide to selling an EV here.