The record price growth currently seen in the used car market is set to continue over the coming months, according to online marketplace Auto Trader. The popular website says the average price of a used car had increased by a massive 15.2 percent year-on-year earlier this month, and the rises show no signs of stopping.
Auto Trader claims it saw more than 15.8 million people visit its site during the week beginning August 9 – up by almost a third (32 percent) compared with the equivalent week in 2019, before the coronavirus pandemic struck. The company also claims there was an 18-percent increase in the hours customers spent researching vehicles on the Auto Trader site compared with pre-pandemic levels, while the number of leads sent to sellers grew 68 percent.
According to Auto Trader, this already “exceptional” level of used car demand has also been boosted by supply issues that plague the new car market. With manufacturers struggling to produce cars during a global semiconductor shortage, Auto Trader says would-be new car buyers are venturing into the second-hand market.
The company says a study it conducted earlier this month found nearly half (46 percent) of new car buyers would not be prepared to wait for more than a month for their preferred vehicle. And 74 percent of respondents would be open to purchasing a used alternative if their brand-new choice wasn’t available within the desired time-frame.
With Auto Trader forecasts suggesting demand will outstrip supply by around 600,000 cars this year, the company expects the inflated used car prices to be with us for a while. In fact, the organisation’s data and insights director, Richard Walker, said there would be a “sustained period” of high demand.
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“Used car demand is being fuelled by many factors, not least consumer confidence, low unemployment levels, concerns about safety on public transport, but now also the supply constraints we’re seeing in the new car market,” he said. “We estimate there are up to 600,000 new car transactions that won’t happen this year because of these constraints, with many consumers looking to used car alternatives. This suggests we can expect a sustained period of positive used car demand.
“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. 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.”