Used Car Prices Up After Months of Decline
Last month, for the first time since October, the price of used cars crept upwards. Demand is tightening, and that seems to be the driving force behind it.
Auto Trader, a company that tracks these trends, dug into the data and found something interesting—prices on their platform ticked up 0.5% from the previous month. That means the average cost of a used car is now sitting at about £16,671. Not a huge jump, but a shift nonetheless.
Since last autumn, prices have been in a steady decline. Now, though, things are changing. Experts think that higher demand, mixed with a limited supply of available cars, is behind the reversal. In February alone, the availability of used cars dropped by 2% compared to the same month last year. Meanwhile, demand actually grew by 3%. Simple economics, really—when people want more of something that’s getting harder to find, prices climb.
Consumer activity on Auto Trader also backs this up. More people are browsing, searching, and engaging with the platform—2.8% more than the same time last year, to be exact. And when people are looking, it usually means they're buying.
How quickly cars are selling also tells part of the story. On average, a used car was gone within 28 days last month. That’s the fastest turnover rate since September. Clearly, people aren’t hesitating as much. Dealerships are feeling the boost, too. A lot of it probably has to do with the improving economy, and the Bank of England cutting interest rates yet again—the third time since August. When money's easier to borrow, spending follows.
Auto Trader’s surveys show confidence is climbing. In February 2024, 90% of buyers felt good about affording a car. Now? 92%. Not a huge jump, but it’s going the right way. Also, 75% of Auto Trader users say they’re planning to buy a car in the next six months. That’s a big chunk of potential sales on the horizon.
A change in market conditions is also affecting pricing strategies. In February, fewer cars entered the market priced below their true value. Even so, there’re still a lot of missed opportunities. Analysis suggests that roughly 8,500 dealers are listing about 56,000 in-demand used cars under market value. That adds up to around £21 million in potential profit just slipping through the cracks.
Richard Walker, Auto Trader’s data and insights director, weighed in on the findings. He acknowledged the market's initial turbulence but pointed out that things are trending positively: prices are rising, demand remains solid, and transactions are outpacing last year. One of the most promising signs? Retailers are adjusting. They're getting smarter about pricing, using data to maximize value instead of underselling their stock.
That said, it’s not a simple market. Things are moving quickly, and dealers have to keep up. Walker believes success will depend on a mix of strong data, technology, and good old-fashioned sales expertise. Staying adaptable is key.
On another note, demand for used electric vehicles is also making waves. Earlier today, Car Dealer reported that new EV sales rose in February, with electric cars making up a quarter of all new registrations. Now, Auto Trader’s data shows the used EV market is following suit. Interest in second-hand EVs has surged—up 24% compared to last year.
But here’s the twist: supply is growing even faster. It jumped 44%, nearly double the rate of demand. More EVs on the market and not enough buyers to keep up means one thing—prices are taking a hit. Last month, the average price of a used EV dropped by 1.5%, settling at £25,395.
On the other hand, traditional fuel cars are heading in the opposite direction. The average price of a used petrol vehicle climbed 0.8% to £14,685, while diesel prices saw a similar 0.8% increase to £13,925. For now, electric cars are the ones facing downward pressure, giving buyers a chance to snag a deal—if they’re ready to take the leap into EV ownership.
Source and Image: Car Dealer Magazine