Strong growth in average used car prices has continued into August based on data observations from the circa 12,500 retailers currently advertising on Auto Trader.
On a like-for-like basis, last week (w/c 10th August) saw a 6.2% price increase on the same period last year, which represents 15 weeks of consecutive price growth.
As highlighted in July’s data, this growth is being driven by the strong performance of internal combustion engine (ICE) vehicles, a result of the high demand and lower supply in the market.
Last week petrol vehicles saw a like-for-like price increase of 6.9%, while diesel prices were up 6.3% year-on-year. It marked consecutive price growth of 24 weeks and 13 weeks respectively.
Supply and demand dynamics impacted low emission cars too, but in reverse to their ICE counterparts, with supply exceeding demand, last week saw the 20th week of price contraction for alternatively fuelled vehicles (AFV), recording an average price fall of -1.2%.
Looking at the average weekly prices within age brackets, those used cars aged 10-15 years have seen the largest growth so far this month, recording a year-on-year increase of 10.3% last week. It was followed by five to 10-year-old cars, which were up 9.1% on the same period last year.
Premium versus volume
In July both premium and volume brands recorded a strong price growth as a result of demand outstripping supply in the market. The latest snapshot of cars available on Auto Trader reveals this performance has continued into August, with the average price of used premium and volume cars increasing 4.3% and 10% respectively.
The price performance recorded in August has been driven, in part, by strong demand, as highlighted by the record number of daily visits to Auto Trader’s marketplace.
During the week of August 10-16, there was an average of 2.1 million visits each day across its platforms, which is a 26% increase on the same period last year.
Auto Trader’s research supports this; out of 58,461 Auto Trader users surveyed in July, nearly a quarter (24%) intended to buy a new or used car within the next three months and 30% within the next six.
Richard Walker, Auto Trader director of data and insight, said: “It’s encouraging to see that over two and a half months after forecourts were permitted to reopen, and with stock levels slowly returning to normal, prices have continued to climb.
“This is a result of the surge in consumer demand which shows no sign of slowing in August.
“While the majority of auction houses are yet to open their auction halls, online channels are close to pre-COVID-19 capacity levels, which has seen the supply challenges many retailers faced after lockdown easing in recent weeks.”
Walker said Auto Trader is hearing concerns about the impact of economic uncertainty and the end of the Government’s furlough scheme, but strong consumer metrics should continue to underpin buoyant sales and prices in the coming weeks.
Retailer pricing behaviour
While the number of retailers making price changes and the value of their price adjustments has begun to increase since the end of the lockdown restrictions, they remain lower than pre-COVID-19 levels.
Last week, the average number of retailers making daily price changes was 2,000; 17% fewer than the same week last year. The average amount being changed on a daily basis was £274. Under normal trading conditions, reductions average between £250-£550 per day.