It reported that October was the 19th consecutive month of growth, with prices increasing a record 25.6% on a year-on-year and like-for-like basis.
This marks the largest monthly jump in growth recorded, up from 21.4% in September, and the average price of a second-hand car has increased nearly £3,000 in just five months, from £13,973 in May to £16,878 in October.
Highlighting just how strong the used car market currently is, nearly one in four (22.2%) of the nearly new cars available in the market (those aged up to 12 months) are currently more expensive than their brand-new equivalents. This is a significant jump on the previous all-time high of 17% recorded in September, and nearly six times as many than in January (4%).
This growth is continuing to be driven by unique market dynamics, Auto Trader said, 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% (64.6 million cross platform visits) when compared with October 2019. The time consumers spent researching their next car on the marketplace also increased, up 18.8% (a total of 9.9 million hours).
Richard Walker, Auto Trader’s Director of Data and Insights, said: “What we’re currently seeing in the market is the result of basic economics – exceptionally strong consumer demand and a constrained supply chain which simply cannot catch up. Looking ahead, demand will continue to be fuelled by healthy levels of consumer confidence, a positive shift towards car ownership, and the 1.5 million ‘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. 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.”
