Car price

Average price of used cars up 32.2% year-on-year in April

The average price of a used car rose 32.2% on a year-on-year and comparable basis in April.

According to the Auto Trader retail price index, although it scores 25and months of consecutive year-on-year price growth, it points to a slowdown in the market, with the growth rate increasing only a fraction of the 32% year-on-year recorded in March.

The slight slowdown in price growth is the result of a number of factors, including the fact that growth is now overlapping the already very high levels of last year (7.1%). Other contributing factors include a slowdown in consumer demand, which has been fueled by the rising cost of living, growing consumer concerns about the economy and the prospect of significantly reduced disposable incomes.

However, as consumer demand has begun to decline, any comparisons made to 2021 will be heavily skewed due to the exceptional and “once in a lifetime” levels the market experienced last year as we exited the third UK COVID lockdown with high level of pent up demand.

Auto Trader said it would be more accurate to compare the current market with pre-pandemic levels, and according to the latest data from Auto Trader, audience and activity on the site remain strong, the volume of advertising views on its market rising 17% in April 2019. Any suggestion that the market is upside down is therefore incorrect, he said; rather, it reverts to more typical market conditions.

Auto Trader analysis and consumer research also indicate that inflation rates have less of an impact on the market than some commentators predict. Analysis of data from the past two decades shows at least that inflation has had very little influence on used car transactions, and consumer confidence “in the market” remains strong, two-thirds (66 %) of those surveyed in April who said they intended to buy a car in the next three months, which corresponds to the last 12 months.

The majority of consumers who are currently in the market to buy a new or used car said the rising cost of living would not impact their timelines (53%) or budget (48%) .

Richard Walker, Auto Trader’s Director of Data and Insights, said: “In such a rapidly changing market, it’s easy to lose sight of how exceptional 2021 has been for the industry, but context is key. and any suggestion that the used car market is in reverse, or prices are set to fall, is an oversimplification at best, and a misinterpretation of the data at worst.

“While inventory limitations have impacted sales, compared to ‘normal’ pre-pandemic conditions, consumer demand, engagement and pricing all remain strong, helping to drive strong margins. Our data highlights that many market segments are functioning to varying degrees. It is therefore essential that, during this turbulent time, retailers look beyond a national average view and adopt a data-driven strategy to identify and focus on areas where they can win.”