The strong level of consumer demand in the used car market is continuing to fuel record price growth, according to the latest data from Auto Trader.
Based on the circa 400,000 used vehicles currently advertised on its marketplace, the average price of a used car increased a massive 15.2% year-on-year on a like-for-like basis last week. It not only marks 66 weeks of consecutive price growth, but a huge acceleration on what is now a comparatively conservative 5.7% increase recorded during the week of 12th April when physical forecourts reopened.
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Last week there were over 15.8m cross-platform visits to the website – a 32% increase on the same week in 2019. There was also an 18% rise in the hours (2.3 million) consumers spent on the site. As a result of this increased activity on site, the average number of leads being sent to retailers grew 68% compared to the same period in 2019.
Auto Trader research conducted this month revealed that whilst nearly half (46%) of new car buyers would not be prepared to wait for more than a month for their preferred vehicle, 74% would be open to purchasing a used car alternative if their brand-new choice wasn’t available within their desired time-frame.
Auto Trader’s new car market forecasts for this year predict a new car market of 1.8m vehicles, but the underlying consumer confidence and unemployment data suggests the market would be close to 2.4 million if supply challenges were not an issue. This suggests there’s up to circa 600,000 would-be new car buyers that may be looking to the used car market for alternatives.
Richard Walker, Auto Trader’s data and insights director, said: “Based on the incredibly strong metrics we’re observing across the market we anticipate at least 8 million used car transactions this year. However, this doesn’t even begin to reclaim the sales we saw lost in 2020 due to the lockdowns; if used car supply remains robust, we’re confident there’s enough used car demand in the market to outperform our predictions.
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By GlobalData“Whilst our forecast is in contrast to the comparatively conservative predictions of other commentators, we have been, and will continue to be, led by data rather than opinion. This would be our advice to retailers: know your market and know your data, and you will be in the best possible position to respond, whatever the market context.”
