Used prices climb with growing demand
Used car prices rose more in June than any month since January 2019, according to Auto Trader’s Retail Price Index.
The index, which is based on observed pricing data from approximately 900,000 vehicles every month, recorded a 3.7% year-on-year increase in June as the average price of a used car rose to £13,949.
June, the first full month of trading post-lockdown for retailers in England, marks the third consecutive month of used car price growth, following the 0.1% and 1.9% recorded in April and May respectively. As well as the low supply of vehicles in the market, this price growth reflects the huge surge in demand from car buyers.
The Auto Trader marketplace recorded over 64 million visits last month, an increase of 29% on June 2019.
There were also interesting trends in price driven by the age of the vehicle, with older cars seeing bigger increases. In June, the average retail price of a car aged over 10 years increased 6.7% over the previous year, and those aged five to 10 years increased 7% year-on-year. Newer cars aged below five years recorded a more conservative growth of 3% year-on-year.
Director of data and insight Richard Walker said: “At Auto Trader, our valuations are based on observed price data from retailers. We don’t control it or set it, we simply reflect retailer pricing and ultimately, retailer reaction to market supply and demand trends. We’re seeing strong pricing trends at the moment driven by the surge in consumer demand post lock-down and we expect this to continue in the coming months.
“The most successful retailers continue to achieve the best margins by utilising the retail back pricing philosophy. They use what is happening at a retail level to determine what they pay at trade. This approach feels more important than ever at a time when both the B2B and B2C markets will be driven by different factors.”
