Used price growth remains unchecked
Despite rising inflation, the record levels of used car price growth shows no sign of easing, with average prices increasing a massive 26.9% last week on a year-on-year (YoY).
According to Auto Trader, it marks the 80th consecutive week of price growth, and an almost four-fold increase in just six months, rising from a now relatively conservative 6.8% in May 2021.
This recent acceleration has been fuelled by the massive levels of consumer demand in the market, and the ongoing drop in levels of supply, which were down eight per cent last week versus 2019. The shortage of microchips and other raw materials which is directly and dramatically impacting worldwide supply of new cars is having a significant knock-on effect on the remarketing supply of used cars.
Despite this, 22% of Auto Trader visitors intend to purchase within the next three months, while 43% intend to do so within two weeks, which is up from 41% in September.
Auto Trader’s data and insights director, Richard Walker, said: “To see such a huge increase in car prices in such a short period of time is truly remarkable and is indicative of the current perfect storm of exceptionally high levels of consumer demand coupled with very constrained new and used supply channels. We’re also comparing against a period of national lockdown last year, which will further contribute to the high level of growth we’re seeing.
“Although inflation will always pose a threat to demand, based on the positive consumer metrics we’re tracking across the retail market, as well as broader economic factors such as the record number of job vacancies reported just this week, we don’t anticipate any significant easing beyond normal seasonal trends. Accordingly, with such strong levels of demand, and no end in sight for the current supply challenges, we can expect the strong year-on-year price growth to continue well into next year.”
