The average price of a used car rose 32% on a year-on-year and comparable basis in March.
According to the Auto Trader retail price index, this is the 24and months of consecutive year-on-year price growth; over this period, motorists will have seen the average value of their used car increase by almost £4,400.
As year-on-year prices continue to rise, Auto Traders said it was clear the rate of growth was beginning to slow, with March’s 0.1% rise from February’s 31.9% representing the lowest monthly move since November 2020.
Underlining the current resilience of the used car market, the latest on-site research from Auto Trader suggests that consumer confidence remains robust. About 40% of the roughly 1,600 people polled in March intend to buy in the next two weeks and 67% want to buy in the next three months.
Richard Walker, Director of Data and Insights at Auto Trader, said: “Although used car price growth and consumer demand are slowing, it is important to put this into context. Against a backdrop of “once in a lifetime” demand levels in 2021, it’s easy to misinterpret the data as a declining market, but a quick look under the hood reveals that any suggestion that prices are on the dropping point is unfounded. Despite growing economic pressures, the appetite for new and used cars remains above pre-pandemic levels, which, combined with the continued shortage of supply, will keep used car prices at a low. high level for the foreseeable future.
One in five (20%) nearly new cars currently available (those less than 12 months old) are more expensive than their brand new counterparts. Over the last 12 months the average price of these almost new cars has risen by around £8,700 and over £11,700 over the past two years. Remarkably, despite this unprecedented pricing momentum, nearly new cars sold on average 22 days faster last month than in March 2021 (30 days vs. 52).
Current record fuel prices are influencing the market dynamics of electric vehicles (EV) and internal combustion engine (ICE) vehicles. On Auto Trader, demand (based on searches and ad views) for electric vehicles has gradually waned since the initial fuel crisis in fall 2021. However, as pump prices have accelerated in recent weeks, there has been a noticeable reversal of this trend. , with demand levels for premium and branded electric vehicles by volume increasing by 79.1% year-on-year, respectively (up significantly from the 28.8% year-on-year growth recorded in February) and 120.2% year-on-year (vs. 53% year-on-year).
Although the supply of electric vehicles is growing, these external factors are driving demand at a much faster rate, helping to fuel very strong price growth for premium brand electric vehicles (20.1% YoY/ £50,499) and volume (27.5% / £26,137).
Sue Robinson, chief executive of the NFDA, added: “Used car prices remain at high levels despite a level of stabilization. Given the impact that external factors such as the rising cost of living are having on consumer confidence and given the continued supply constraints, the latest data shows that underlying demand for used vehicles remain robust. It is encouraging to see that the appetite for new and used electrified vehicles continues to be particularly strong.