Used car prices on the up again
The average price of a used car rose in April, marking the first year-on-year growth since July last year.
According to the latest data from Auto Trader’s Retail Price Index, which is based on pricing analysis of about 900,000 vehicles every month, the average price of a used car in April reached £13,864.
However, the research also revealed that most retailers are still static. In normal trading conditions, approximately 2,500-3,000 retailers adjust the price of their stock every day. Last week, this figure had fallen to approximately 1,075. Typically, 21-25% of retailers change prices on a daily basis, but last week, just nine per cent did, indicating the majority of retailers are yet to begin repricing stock.
Richard Walker, Auto Trader’s director of data and insights, said: “We’re very mindful of our responsibilities to customers and to the wider market, and so we’ve been closely monitoring the pricing of hundreds of thousands of vehicles to ensure we’re providing the most up to date and accurate evidence based insights.
“As we saw during the 2008/09 financial crisis, large price adjustments on a mass scale will have a major detrimental impact on the financial health of the industry. We need to avoid a repeat of this scenario and so it’s reassuring to see that retailers are not cutting prices. With consumer demand returning to the industry, we see absolutely no reason for them to do so.
“Any negative movement based on speculation or editorial opinion is likely to result in a self-fulfilling prophecy of sharply falling prices. We strongly believe retailers should hold firm on prices until the evidence suggests that they’re moving, which is more likely to result in any adjustment being a measured and gradual adjustment.”
