Rising consumer confidence driving UK used car market
Auto Trader has reported rising consumer confidence with two thirds of those surveyed planning to buy a car in the next six months.
Meanwhile, two fifths said they were planning to purchase a new vehicle in the next two weeks.
The survey also found that nine in 10 prospective car buyers said they were at least as confident or more confident in their ability to afford a car than they were previously.
This comes after analysis of its own data revealed that consumer demand, speed of sale, and transactions were all stable in June.
Supply chain
However, supply remains a challenge as the full impact of the three million new cars not sold during the pandemic has flowed through the parc, shifting from one to three-year-old cars to the three to five-year segment. This is the core age group of the used car market, but AutoTrader has reported that stock has fallen from 4.8 million units in 2019 to just three million.
Auto Trader expects this to fall again to 2.9 million units by the end of the year.
Meanwhile, Auto Trader’s Retail Price Index recorded that that the average price of one to three-year-old cars was down 1.4% to £25,112 year-on-year, while models under a year fell 3.4% to £32,664.
However, those aged five to 10-years old rose 1.2% to £13,541, and those aged over a decade were up 4.1% to £6,561.
Robust demand
Marc Palmer, head of strategy and insights, said: “As we enter the second half of the year, our data shows that the fundamentals of the used car market remain strong; consumer demand is robust, and cars are selling at pace, which combined with the overall softening in supply, means retail prices are stable, and continue to follow seasonal norms.
“At a granular level, there is considerable nuance in the market, however, which is impacting retailers’ traditional stock profiles and making the job of finding profitable cars more competitive. It’s why using insights over instincts to power your forecourt strategy is more important than ever.”
