July saw the biggest monthly increase in used car prices since August 2018, Auto Trader said today.
The latest data from its retail price index, which it bases on an analysis of some 900,000 vehicles each month, revealed that the average sticker price of a used car last month was £13,888 – a 4.6 per cent year-on-year increase on a like-for-like basis, and the fourth consecutive month of price growth.
It said it reflected the strong level of demand in the market, adding that demand on Auto Trader had been sustained at record highs throughout July and didn’t show any signs of dropping during August.
Auto Trader said its marketplace was continuing to record an average of more than two million visits each day two months after showrooms in England were allowed to reopen, and in July it saw a record 64.4m cross-platform visits.
It said the price growth was being driven by the strong performance of used internal combustion engine (ICE) vehicles, especially petrol, which last month saw average prices rise by 5.6 per cent (£12,604) – the highest rate of growth since October 2018.
Diesel enjoyed a similarly strong performance, with average prices going up by 4.1 per cent (£14,705),which was the highest growth rate since September 2014.
But although ICE vehicles have been recording high demand and low supply, it’s the opposite for their low-emission counterparts. While the demand for pure-electric vehicles (EV) has increased by 75.2 per cent year on year, supply has overtaken it – going up by 87.7 per cent.
This caused the average price of an EV to fall by 4.3 per cent to £25,639 in July. Prices for alternatively fuelled vehicles fared better, dropping by 1.1 per month (£22,508), which marked five months of contracting prices.
Because growth in demand outstripped supply, increases were recorded in every price band of used car. Demand for 10-to-15-year-old vehicles saw a year-on-year growth of 23 per cent in July, while supply fell by 16 per cent, which saw them recording the highest price growth among any age group, leaping by 10.4 per cent (£4,254).
By way of contrast, vehicles up to a year old registered the lowest rise at 2.6 per cent (£26,500).
Premium and volume brands both saw demand outstrip supply in July, with premium recording an average price growth of 1.8 per cent (£20,779) and volume at 9.8 per cent (£9,143).
Richard Walker, , Auto Trader’s director of data and insight, said: ‘Over the last few months, used car prices have benefited from high demand in the market whilst the supply side has emerged more slowly from lockdown.
‘Even when auctions reopened, the supply of new stock in the market has been slow to return to pre-Covid-19 levels, whilst demand has remained at record levels.
‘Looking ahead, at a time of economic uncertainty and with so many variables at play, we will continue to be data-driven rather than publish opinion-based statements about the future.
‘Whilst consumer demand shows no signs of slowing into August, we have seen that supply constraints are working their way through, so we expect the growth rate we’ve seen in recent month to stabilise somewhat, rather than continue to accelerate each month.’
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