The used car market continues to see increases in demand, thus raising prices
It would appear the pandemic has not only inflated house prices and artificially inflated stock markets around the world but has also affected the UK used car market in a similar way.
Used car prices have seen 17 months of consecutive increase, with the average price of a used car reaching £15,288 in August 2021 according to data from Auto Trader.
The rate of year-on-year growth has more than doubled over the last three months, going from an 8.1% increase in May to a 17.2% increase in August. This means that roughly this time last year (August 2021) the average price for a used car was around £13,000. That price has since increased by over £2,200.
Auto Trader also reports a record-level of August demand, with over 70 million visits to the website across various platforms. This large amount of users on the site marks a 36% increase when compared to August 2019.
Although this level of demand could be due to the rippling impact of furlough, working from home, returning to work and all the other things that come with the pandemic, it should also be noted that the used car market has seen a decrease in supply. In August 2021, used car supply was 12% lower when compared to August 2019 which could be a factor in the rising prices.
As used car prices rise, Auto Trader’s latest consumer sentiment survey suggests that there’s no sign of things slowing down. After 17 months of consecutive rises, the survey found that 25% of approx. 2,200 respondents intend to buy in the next three months and 39% intend to buy in the next two weeks.
Interestingly, the survey also revealed that 50% of respondents feel more confident in their ability to afford their next car than they did a year ago and 26% believe that car ownership is more important now than it was before COVID.
Auto Trader’s director of data and insight, Richard Walker, said “To put the price movement into context, in August 2020 average prices were increasing at a rate of 6% year-on-year, which at the time marked a new record. Whilst few could have imagined a year later, growth would be accelerating at nearly three times that rate”
Let us know if you have bought or sold a used car over the past year, in the comments.
If you enjoyed this, you may also like: ‘Revealed: UK’s Most and Least Reliable Cars’
For more articles like this, receive our weekly e-newsletter, including partner deals and all things motoring, register your email below.