August Saw a 1.1% Rise in Used Car Prices, Hindered by Declining Values of Newer Cars and Used EVs
Auto Trader reported that lower prices for young used cars and second-hand electric vehicles are preventing significant overall price hikes.
In August, the average used car cost £17,732, a mere 1.1% increase from the previous year, in stark contrast to the 15.6% and 17.2% surges seen in 2022 and 2021, respectively. Nonetheless, the average used car price surged by an astounding 36.9% compared to August 2020.
In August, prices dipped by 0.8%, a typical seasonal trend, according to Auto Trader. Although average used car prices rose, the increase would have been more significant if newer cars and used UK EVs hadn't fallen in price.
The average cost of a three-year-old used car was £29,699, down 3.5% YoY and 0.9% MoM. Auto Trader attributes this to increased supply and consumer demand.
The decline in prices of newer used cars is compounded by the sharp drop in used electric car prices and increased market supply. In August, used EV sales surged by 97.4%, with the average price at £31,618, a substantial 22.6% decrease from August 2022.
Notably, the Audi e-tron saw the most significant depreciation at 24.9%, followed by the Mini Electric (-23.9%) and Peugeot e-208 (-22.5%). Surprisingly, the top five depreciating used cars were all electric, but experts don't anticipate an imminent price crash, echoing previous concerns of a two per cent value drop, marking the worst August in 13 years.
Auto Trader's Director of Data and Insight, Richard Walker, addressed recent market trends. Despite increasing volatility due to improved COVID-related new car supply, Walker emphasised that headline figures can be misleading.
He urged retailers to focus on data rather than headlines for pricing and stocking decisions, noting the nuanced nature of the market. As newer stock, especially electric vehicles, becomes more available, prices may soften, but there's no indication of a steep decline.
Strong pricing opportunities exist, especially for used EVs, if retailers leverage data for informed buying and selling strategies. Profit potential remains substantial.
Check out our step-by-step guide to buying the best used cars and head over to our marketplace for used cars Milton Keynes for some hot second-hand car deals.
Source and Image: CarDealerMagazine