Used car prices hit record growth in six months
Used car prices have registered five years’ worth of growth in six months, with costs increasing by £3,400 since May.
Data from the Auto Trader Retail Price Index has shown that used car prices – now at an average of £17,366 – have gone up 28.6 per cent on a year-on-year basis, making November the 20th consecutive month of growth.
Research also revealed that currently more than 25 per cent of nearly new cars are more expensive than their brand new counterparts, going up from the previous 22.8 per cent all-time high recorded in October.
“There’s been some suggestion that the period of huge price growth is coming to an end, or we’re finally about to see the ‘bubble burst’,” said Auto Trader’s director of data and insights Richard Walker. “Beyond what we’d expect for this time of year however, we’re seeing absolutely no evidence of that being the case.”
Prices are driven by an increase in demand levels, which is highlighted by the surge in traffic to Auto Trader’s market place. The website received 56.9 million visits last month, up 23 per cent compared with November 2019, while the amount of time consumers spent researching their next car went up 12 per cent.
As a result of shortages, supply has gone down 9 per cent compared with 2019, creating favourable market conditions for the hike in prices.
“Looking further ahead, the new and used car supply constraints will last for much of next year, and with the economy set to grow, we can expect to see the very robust levels of consumer demand continue,” Walker added. “Simple economics therefore point to a continuation of very strong price growth well into 2022.”