October marked the 19th consecutive month of price growth on Auto Trader, with used car prices rising by a record 25.6% year-on-year.
The price growth means that the average price of a second-hand car has jumped almost £3,000 in the last five months, from £13,973 in May to £16,878 in October.
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Such is the strength of the market, 22.2% of the nearly new cars on the market are currently more expensive than their brand-new equivalents.
Auto Trader attributes the growth to unique market dynamics, in particular the exceptionally high levels of consumer demand in the market. This is reflected in the volumes of traffic to Auto Trader over recent months, which last month was up 30% (64.6m cross platform visits) when compared with October 2019.
Richard Walker, Auto Trader’s director of data and insights, said: “Looking ahead, demand will continue to be fuelled by healthy levels of consumer confidence, a positive shift towards car ownership, and the 1.5m ‘lost’ car sales in 2020. Add to the fact it’s unlikely we’ll see a strong return on supply levels due to the fall in new car sales volumes over recent years and the lower levels of pre-registration, we can expect strong year-on-year price growth to continue well into next year.
“Although we may see some slight week-on-week softening as a result of typical season trends, for year-on-year growth to slow to the low single digit levels we saw pre-pandemic, supply and demand levels will need to even out. From what we’re seeing in the market, the wider economy, and the hundreds of thousands of daily price observations we’re able to track across the live retail market, there’s simply no evidence to suggest that will be anytime soon.”
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Walker continued: “One of the big learnings of the last 18 months, is in such a fast-moving market, it’s vital retailers follow a data-led pricing strategy, even once these dynamics soften, to ensure they’re securing the very best possible margin for their stock.”
