Used car prices in the UK have soared by an average of more than £3,000 since May, seeing five years’ worth of growth in just six months.
New pricing data from online marketplace Auto Trader shows that November marked the 20th consecutive month of price rises across the used car market, with everything from luxury sports cars to people carriers enjoying up to 50% increases in average values.
The latest data shows that the average used car price on the platform is now £17,366. That is £3,400 more than in May 2021. Based on the price trajectory between 2017 and May 2021, used car values were not expected to reach that level until 2026.
An Auto Trader spokesperson said the reasons for the continued strength of the used market were simple: “Although the level of price growth is exceptional, it’s being fuelled by simple economics – very high levels of demand, coupled with low levels of supply. The increased consumer demand is highlighted in the recent surge in traffic to Auto Trader; there were 56.9 million visits in November, which is a 23% increase on November 2019.”
According to Auto Trader’s analysis, supply is down 9% compared with November 2019, making competition for cars more fierce.
The figures also reveal that a quarter of nearly new models - those up to 12 months old - are selling for more than their original list price as buyers struggle to find available brand-new stock.
According to the data for November, there was a slight softening of growth compared with previous months but Auto Trader’s director of data and insights, Richard Walker, said there was no end in sight to the continued growth.
He commented: “There’s been some suggestion that the period of huge price growth is coming to an end, or we’re finally about to see the ‘bubble burst’. Beyond what we’d expect for this time of year however, we’re seeing absolutely no evidence of that being the case.
“Looking further ahead, the new and used car supply constraints will last for much of next year, and with the economy set to grow, we can expect to see the very robust levels of consumer demand continue. Simple economics therefore point to a continuation of very strong price growth well into 2022.”
Despite a push towards new electric vehicles and strong EV sales in the new car market, prices for traditional combustion engine cars have soared an average of 30% compared with November 2020. The average used petrol car now costs £16,189, while the average second-hand diesel is worth £17,279.