Huge demand drives record used price growth

Used car prices rose 14.1% in July to a record average price of £14,781.

This is according to results from the Auto Trader Retail Price Index, which is based on daily pricing analysis of about 900,000 vehicles.

Further, this was the 16^th consecutive month of growth on a year-on-year basis, with the rate of growth doubling in the last three months alone.

The growth has been fuelled by growing demand, with retailers selling vehicles in an average of 19 days compared to the 24 it took 12 months ago.

Director of data and insight, Richard Walker, said: “For the rate of price growth to double in just three months is really quite incredible and is testament to the exceptional levels of consumer demand in the market. Based on what we’re seeing more broadly, such as the strong levels of disposable income and savings, as well as improving consumer confidence and low interest rates, we have every reason to believe that these levels have the potential to remain for much, if not all, of 2021.

“What’s more, we have barely begun to scratch the surface in reclaiming the 1.4 million ‘lost’ transactions in 2020 as a result of closed physical showrooms. It’s for these reasons we feel very comfortable in revising our forecast for this year at much higher rate than some commentators have suggested, to circa eight million used transactions.”