Demand strong for used cars
Both transactions and demand in the used car market grew in January, according to Auto Trader’s Price Index.
But while prices are showing signs of stabilising, Auto Trader data revealed a price drop of 7.5% year-on-year (YoY) and like-for-like. This is despite a 6.1% increase in demand.
This suggests that many used model are under-priced, with about 46,000 cars advertised below their market average, meaning a potential profit of around £30m is being missed.
In terms of fuel types, prices for electric vehicles are down 21.8% YoY to £28,836, while petrol (£15,256) and diesel (£15,111) are down 6.2% and 5.8% respectively.
Richard Walker, Auto Trader’s data and insight director, said: “As well as our own metrics, it’s reassuring to see broader economic indicators pointing to stable and robust market conditions, including the latest consumer confidence data, which reached a two-year high in January. Although fewer than we’ve seen previously, given such positive market fundamentals, it’s disappointing to still see stock being priced under their true market value, particularly what we would call the best-of-the-best. By not applying a retail-back approach to pricing, retailers are at risk of selling themselves short and missing out on significant profit opportunities.”
