An 11.1% June uptick in used car prices on Auto Trader suggests that dealers have been making efforts to realign their advertising to accommodate recent months’ wholesale price surge.
The Auto Trader Retail Price Index recorded an average used car price of £14,276 in June as it registered a 15th consecutive month of price growth and the highest single month-on-month price growth ever recorded by the Index.
Auto Trader said the growth had been driven by the “huge levels of consumer demand, which drove its cross-platform visits to 66.6 million – a 34% increase on the same period in 2019.
Stock turn has also accelerated, according to Auto Trader. It took an average of 23 days for new stock to leave forecourts, five days faster than June 2019.
Auto Trader director of data and insight, Richard Walker, said: “Whilst supply constraints have compounded the situation, this massive acceleration in used car price is being driven by record levels of demand in the market.
“We’ve barely started to catch back the 1.7 million ‘lost’ transactions in 2020 while retailer showrooms were closed.
“Coupled with the strong levels of disposable income and savings, as well as improving consumer confidence and low interest rates, it’s safe to expect very high demand to continue for the rest of this year.
“The steep trajectory we’ve been recording will begin to balance out as pressure on supply channels eases and the current levels of demand soften.
“However, we have every confidence we’ll see strong levels of price growth for a good period of time to come.”
Dealer pricing adjustments
In the latest AM magazine, Cap HPI head of valuations, Derren Martin said that the pace of wholesale price rises had seen the usual rules go “out of the window”.
Auto Trader said that the strength of the market had resulted in fewer retailers adjusting prices on fewer vehicles alongside increases in the number of retailers making positive price adjustments.
During the final week of June, of those retailers making daily adjustments, 37% increased their sticker prices, which is up on the 32% recorded in May and 22% in April, it said.
Diesel used cars have been increasing in price at a rate higher than any other fuel types since November 2020, jumping from 10.2% YoY in May, to 13.1% in June.
The average used petrol car rose 9.6% in price last month – 3ppts higher than in May (6.5%).
The average used volume electric vehicle (EV) increased 9.2% in price YoY (£22,050) last month.
Premium EV values declined 7% YoY (to £44, 441).
National franchised Dealers Association (NFDA) chief executive, Sue Robinson, said: “The high levels of continued consumer demand are encouraging for both NFDA members and the UK economy as a whole.
“As further restrictions are scheduled to be lifted, franchised dealers continue to operate in secure and safe environments where consumers can physically acquaint themselves with their next vehicle purchase.”