Demand unabated through September
Used car prices have continued to grow through September.
Based on data from the 425,000 vehicles currently advertised on the Auto Trader marketplace, there was a seven per cent like-for-like increase in sale prices from 7-13 September on the same period last year.
The price performance has been driven by the exceptionally strong demand in the market, as highlighted by the record number of daily visits to Auto Trader’s marketplace. Last week saw an average of 2.1 million visits each day across its platforms, which represents a 30% year-on-year increase.
The health of the market is reflected in the confident pricing strategies being employed by most retailers. Whilst the number of those making price changes and the value of their price adjustments have begun to increase since the end of the lockdown restrictions, they remain significantly lower than pre-Covid-19 levels.
In total, 9,683 cars were repriced during the week, which is 35% fewer than last year. In normal trading conditions reductions average between £250-£550 per day. Last week the average price reduction was £279 which remains at the lower end, and just £15 more than the end of August.
Auto Trader’s director of data and insight, Richard Walker, said: “From a pricing perspective what we’re observing on our marketplace is a very gradual return to pre lockdown levels, with a small increase in retailers active but across fewer numbers of cars and the adjustments at the lower end of what we would typically see. It’s indicative of the confidence in the health of the market and while demand continues to grow at such robust levels, we’re not seeing any indicators that suggest retailers are under pressure to reduce their prices.
“Contrary to many expectations of a drop in consumer confidence, our research suggests the opposite is it true. In December last year we began tracking consumers’ confidence in being able to afford their next car, and in August this reached its highest rate. What’s more, 45% of consumers on our site said they’re more confident in their ability to afford their next car than they were a year ago. All of these metrics offer a promising outlook, and whilst the rate of growth may begin to ease, we have every reason to believe that both used car prices and sales will remain buoyant during the weeks ahead.”
