Used car prices are rising again – despite faster new car delivery times and Britons cutting back on expensive purchases during the cost of living tightness.
The combination of high demand and low stocks of used vehicles has seen the average price of a used motorcycle rise 2.3 percent from mid-March 2022, according to Auto Trader.
This is the first acceleration of year-over-year price growth in 10 months. It means the average price of a car listed for sale on Britain’s largest used vehicle website is £17,720.
But while average vehicle prices across all fuel types are rising again, the value of used electric vehicles (EVs) is declining.
‘Don’t expect used car prices to drop anytime soon’: Experts warn motorists that high demand and low inventory keep used vehicle values at record highs despite cost of living crisis
The average price of a used car for sale on Auto Trader increased by 2.3% compared to mid-March 2022. It is the first acceleration of year-over-year prices since April 2022
To put into perspective the huge rise in used car prices, Auto Trader’s historical data shows that in March 2020 – the month Britain went into Covid lockdown – the average value of a used car on its website £13,601 wash.
It means the average price of a used vehicle has increased by 30 per cent or £4,119.
This month, price growth accelerated for the first time since April 2022, following a gradual year-on-year decline over the past 10 months.
Auto Trader says the jump in March was caused by “the imbalance of supply and demand in the market.”
It says used car availability is down 12 percent year-over-year, but demand – as measured by website page views – is up 9 percent from the same month in 2022.
Commenting on the data, Auto Trader’s director of data and insights, Richard Walker, says the market has picked up since Christmas. He warned motorists not to expect record-high used car prices to reverse any time soon.
“As soon as we came out of the quiet holiday season, we saw signs of a used car market in very good health,” said Walker.
The acceleration in price growth after 10 months of weakening could not be a clearer barometer of the current market, which continues to strengthen this year despite the broader economic and political backdrop.
“While growth rates may slow again, with no immediate change expected in the current dynamics of supply and demand, anyone predicting a fall in used car prices soon will be disappointed.”
In terms of the largest percentage of climbers, the small Hyundai i10 has recorded the largest increase, with values up 16 per cent this month to £8,410.
The luxury Mercedes-Benz S-Class is next on the list, with a 14.6 percent increase in value from a year ago. The average S-Class now costs £36,149.
Other notable risers are the Fiat Panda (+14.1 percent), Renault Twingo (+13.4 percent) and Kia Picanto (+12.9 percent), the latter of which is the sister car of the Hyundai i10.
Auto Trader says there is a ‘huge oversupply’ of used electric cars hitting the market, which is why advertised prices for popular models are falling
Prices of used electric cars are falling
While the average price of a used car listed on Auto Trader is on the rise again, EV values are falling.
The company says ‘average growth in used car sales prices is being held back by the continued contraction in the value of used EVs’, which fell 13 per cent year on year to £33,060 in March.
By contrast, the average price of a used petrol (£16,102) and diesel car (£16,236) is up 4.3 per cent and 2.4 per cent respectively.
It says this is due to a “huge oversupply.”
Auto Trader’s semi-monthly report said: ‘Current supply of both used petrol and diesel cars is down about 20 percent year over year, but the rate of used electric car stock growth has exploded, with a huge increase of 261 per month. cent on an annual basis.’
Since August, stocks of the Nissan Leaf are up 313 percent, while the Renault Zoe is up 235 percent and the Tesla Model 3 is up 148 percent.
Jaguar’s I-Pace was the biggest price drop of any car, with advertised prices for the premium EV falling 24.3 percent year-over-year.
The Tesla Model X (-21.9 percent), Model 3 (-21.3 percent) and Model S (-16.6 percent) also recorded large price drops.
In fact, of the 10 biggest price droprs, seven were EVs (including the VW ID.3, Audi e-tron and Renault Zoe).
“This dramatic rise results in a significant weakening in values – since September, year-old Model 3 prices have fallen to around £8,000 and show no sign of slowing down,” the report said.
Availability of pre-owned EVs is growing more than five times faster than demand, with interest in battery vehicles up 47 percent from the same period last year.
Richard Walker added: “Despite some of the recent reports, it is clear that consumer demand for EVs remains very robust, so it is important that we correct the myth that consumers don’t want them and they don’t work.
“It will be critical to encourage car buyers to use used EVs through incentives, marketing and information to demystify them.”
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