Auto Trader has reported its 23rd week of consecutive used car price rises as the sector continued to defy the impact of COVID with values up 8.5% between October 5 and 11.
The marketing platform said that a current imbalance of supply and demand was responsible for the ongoing trend as car buyers continued to flock to the online portal, with 14.3 million visits – a 21.9% increase on the same period last year – recorded in the period.
Demand increased 8.8% year-on-year (YoY), whilst supply was down 5.7% year-on-year, during the week starting October 5, it said.
Auto Trader’s director of data and insight, Richard Walker, said: “Halfway into October and it’s already clear that the market is continuing to defy the naysayers that predicted a price crash in September.
“We’re maintaining exceptional levels of traffic on our marketplace, and despite the introduction of new tiered restrictions across the country, based on previous analysis done on areas where restrictions have already been tightened, such as Leicester, we’re confident it will have marginal impact on demand at this stage.
“In fact, our research points to new opportunities; last week we saw an increase in people considering owning a car to be more important than it was before COVID-19, and the aversion to public transport is now at its highest rate since we began tracking it in the summer.
“With supply constraints an ongoing issue for many retailers, we don’t foresee any imminent factors that will affect price growth beyond the typical seasonal trends.”
Auto Trader reported that the number of retailers making price changes and the value of their price adjustments had increased since the end of the COVID-19 lockdown but remain either lower than normal traditional conditions, or at the lower end of typical pricing behaviour.
Last week, the average number of retailers making daily price adjustments was 2,351, which is getting closer to the lower end of typical pre-lockdown behaviour (2,500 – 3,000), it said.
In total, 14,057 vehicles were repriced during the week, which is the highest number recorded since coming out of lockdown but remains lower than normal, which typically fluctuates between 17,500 and 24,000 vehicles.
In terms of the actual price reductions being made, pre-COVID-19 retailers typically lower sticker prices between £250 to £550 per day.
Fuel and age
Auto Trader’s analysis of the week starting October 5 showed that demand for petrol-powered used cars increased 12% YoY, as supply fell 1.7%.
Diesel demand recorded an increase of 2.2% YoY, but supply dropped a significant 14.7%, reflecting a trend reported by Aston Barclay last week.
As a result, petrol and diesel vehicles recorded a like-for-like price increase of 8.9% and 9.4% YoY respectively.
Used cars aged 10-to-15 years continue to be affected by a sharp decline in levels of supply, it said, which last week was down 13.5% YoY.
As a result, prices increased by 13% YoY and marked the highest rate of growth so far this month.
The low supply of 10-15-year-old cars in the market was only exceeded by nearly new cars.
Those aged up to 12 months recorded a fall in supply of 48.3% YoY as demand dropped 20.5% YoY.
However, prices increased by a modest 6% – the lowest of any age group.
Hatchbacks and MPVs recorded the highest rate of growth, up 12% and 9.2% YoY, respectively.
However, SUVs remain the most in demand, increasing 16.3%, helping to grow prices 6.6%.