Used car sales increase
Data from the Auto Trader Retail Price Index, revealed that the average price of a second-hand car reached a record high of £12,853 in September; a year-on-year increase of five per cent.
It follows a period of sustained growth for used prices, which have grown twice as fast as its new counterparts since the start of the decade. The average price of a used car has risen from £8,997 in 2011, to £12,731 in 2018, a significant 42% increase in just seven years.
The growth in average used prices can be attributed to knock-on effects of the rise in new car finance, which in 2017 accounted for 88% of all new cars bought in the UK, compared to circa 50% of sales a decade previously. With the average two to three-year ownership cycle of a Personal Contract Purchase (PCP) contract, there has been an increase in younger, more advanced and, crucially, more valuable, second-hand cars entering the market, driving average prices up.
Auto Trader data reveals that these modern second-hand cars are increasing in popularity, helping to drive overall used car sales volumes in recent years. Over the past five years, sales of used cars aged less than three years old have increased by nearly a third whilst sales of five-year-old and 10 year-old-cars have dropped by three per cent and seven per cent respectively.