Consumer demand for used cars is on an ‘upward trajectory’ as showrooms reopened, resulting in increasing used car prices.
Data released today by online car marketplace AutoTrader indicates that the average price of a used car in May was £13,931, which represents a 1.9 per cent increase on the same period last year.
The firm’s Retail Price Index, which gathers data from about 900,000 vehicles each month, saw prices increase by just 0.1 per cent in April – though this was the first growth since July 2019.
The figures are backed up by increased consumer demand, with AutoTrader reporting an average of 1.7 million visits to its website every day, a five per cent year-on-year increase. It added that advert views were up 19 per cent and the number of leads being sent to retailers were up 75 per cent year-on-year.
Richard Walker, Auto Trader’s director of data and insights, said: “Given the negative impact it could have had on the financial health of the market, it’s a huge relief to see that despite the huge pressure over the last 10 weeks, retailers have remained firm and resisted the urge to lower prices. And with consumer demand surging this week, it’s clear it was absolutely the right decision.
“The reopening of showrooms in England this week marks an important first step on the industry’s road to recovery, but with trade auctions remaining closed, the challenge retailers currently face will not be selling cars, but rather restocking them. Such high levels of demand, coupled with a low level of supply, retailers can afford to continue holding firm.
“Retailers should be confident in their pricing and use accurate and up to the minute data, tools and insight to back up their pricing decision.”