Used car prices continue climbing
The current average retail value for a used car is up 3.5% on last year’s levels, which were already 24% above 2021.
This is according to Auto Trader’s Retail Price Index.
However, electric vehicle retail prices are still contracting on a year-on-year basis, with current values down 18.4%. However, there are signs of used EV values stabilising, with the rate of decline slowing between April and May. In contract, the price of petrol and diesel fuelled used cars are currently up 5.8% and 5.4% respectively.
Price growth is due to levels of consumer demand outpacing supply, as well as the recent disruption in public transport. Nearly half (46%) of those surveyed said ownership was important to them because they couldn’t rely on public transport, which is up from a third (34%) two years ago.
Auto Trader’s director of data and insight Richard Walker, said: “Although the economic backdrop is a concerning one, based on our metrics, the growing squeeze on household finances, which will be exacerbated by the latest rise in interest rates, is having a limited impact on car buying demand. Despite potential headwinds, our consumer research supports a cautious, but optimistic outlook for the months ahead. Cars are, for the vast majority of motorists, a fundamental need, as opposed to a discretionary luxury, so we believe the used car market will largely be shielded from wider economic disruptors.”
