UK second-hand car values are growing at record rates in 2021, according to data from online used car marketplace Auto Trader. Using the roughly 400,000 vehicles advertised on the site as a guide, the company estimates average prices were up 12.6 percent year-on-year during the week commencing July 12.
According to Auto Trader, that means prices have risen for 63 consecutive weeks, and price rises are accelerating. During the week commencing April 12, prices rose by what Auto Trader called “a comparatively conservative” 5.7 percent.
The company claims this is due to an increase in demand among consumers following the outbreak of the coronavirus pandemic. Auto Trader says it saw 14.7 million customers visit the site during the second full week of this month, up by almost a quarter (24 percent) compared with the same week in 2019, the summer before the pandemic arrived.
Similarly, the organisation says there was a 14-percent increase in the hours consumers spent “researching” their next car on site, and the number of leads sent to dealers grew 54 percent compared with the same period in 2019.
Furthermore, Auto Trader’s data also showed retailers were able to sell cars more quickly, with stock remaining on forecourts for an average of 23 days during the week before last. That compares with 43 days at the beginning of 2021, although the country was thrust back into lockdown in January.
Interestingly, the figures show just how well used cars appear to hold their value in the current marketplace. An Auto Trader “snapshot” from July 1 found around 700 used vehicles listed on the site for more than their brand-new counterparts, while around one in five nearly new vehicles had a list price within 10 percent of the equivalent new car. Even two-year-old cars are maintaining their value, with 87 different variants priced at 80 or more percent of their RRP.
As a result, the data suggests dealers are still making plenty of money on used cars despite the coronavirus pandemic. Auto Trader says the margin for cars priced between £5,000 and £10,000 has increased by 13.3 percent (an average of £215) compared with pre-pandemic levels.
“The ongoing price growth represents a huge opportunity for retailers, and whilst there are concerns over inflated trade prices, I hope the evidence of our data gives retailers the confidence to buy knowing the very positive trade margins available,” said Auto Trader’s director of data and insight, Richard Walker.
“Encouragingly, wider economic factors, as well as a positive sentiment shift towards car ownership, an aversion to public transport, and the 1.7 million sales ‘lost’ in 2020 while physical showrooms were closed, indicate this high level of car buying demand will continue for the foreseeable future. It’s for those reasons coupled with the huge success retailers have made in adapting to the changing retail landscape, we can be confident of sustained levels of used car sales throughout the year ahead.”