Record increases to second hand car prices are showing no signs of slowing down with October posting the biggest monthly rise on record, according to new data published today.
A 19th consecutive month of rising prices saw the value of the average used motor rise by 25.6 per cent, according to the Auto Trader Retail Price Index.
It means buyers – many of them turning to the second-hand market due to the huge delay to new car deliveries – have seen used prices rise by almost £3,000 in just five months, rocketing from £13,973 in May to £16,878 last month.
Used values soar for a 19th consecutive month: October saw another record rise in second-hand car prices as demand for used motors skyrocketed
The previous record for the monthly increase in average used values was set in September, showing just how high the demand currently is for pre-owned vehicles.
This is highlighted by nearly one in four (22.2 per cent) of ‘nearly new’ cars (those up to a year old) currently being advertised above their on-the-road, brand-new prices.
This is a significant jump on the previous all-time high of 17 per cent recorded in September, and nearly six times as many than in January (4 per cent).
Among the models with the biggest average price increases are both the Land Rover Defender 90 (up 68.8 per cent) and 110 (up 39.3 per cent) variants, with JLR being one of the manufacturers hardest hit by the chip shortage and admitting delivery delays of over 12 months.
Average values are for Defender models of all years, not just the latest-generation 4X4 launched in 2019.
Other notable increases have been recorded for the ageing Jaguar XK sports car, Seat’s seven-seat Alhambra MPV, Hyundai’s i30 family hatchback and the perennial favourite Ford Focus, all of which have seen values rise between 40 per cent and 45 per cent.
The average price of a used car has risen by almost £3,000 in just five months, rocketing from £13,973 in May to £16,878 last month
Auto Trader says the increase in used values has been driven almost entirely by the exceptionally high levels of consumer demand caused by semiconductor shortage’s impact on new car production.
With manufacturers around the world continuing to struggle to get hold of the components needed for their latest models, production delays have seen order books expand and estimated vehicle deliveries pushed back to more than 12 months in some cases.
The online marketplace says this seen unprecedented traffic to its website, which last month was up 30 per cent compared with October 2019.
Another indicator of the huge demand in the market is the average number of views a car advertised on Auto Trader receives. Last month this average increased 35 per cent on a year ago.
As a result, the average number of enquiries being sent to retailers also saw a significant spike, up 40 per cent and cars sold 11 per cent faster last month than in October 2019.
|Rank||Make||Model||Average Asking Price||Price Change|
|1||Land Rover||Defender 90||£77,577||68.8%|
|6||Land Rover||Defender 110||£79,081||39.3%|
Values of all Land Rover Defender 90 models – both old and more recent – have increased by almost 69% year-on-year in October
Demand for practical seven-seat cars has seen second-hand values for the Seat Alhambra MPV rise by 42% year-on-year
The perennial Ford Focus is another model that has seen a sharp rise in used values during October, up 40%
The jump in demand, enquiries and rapid sale times does mean that supply of used cars is thinning out. In fact, retailers had 12.2 per cent fewer motors advertised than they did two years ago – and its vehicles with internal combustion engines that have the biggest declining numbers.
The number of used petrol and diesel cars in the market fell 5 per cent and 12.8 per cent year-on-year respectively in the face of massive demand.
As a result, like-for-like prices for both have risen substantially, with the average price of a petrol car (£15,620) growing by 26.2 per cent year-on-year and the price of a diesel car (£16,880) growing by 26.7 per cent.
Demand is also far outstripping supply of low-emission vehicles, which has pushed the average price of the average EV 20.7 per cent higher to £25,271.
Auto Trader’s data is based on daily pricing analysis of 900,000 vehicles listed for sale on the site.
Auto Trader said there could be some ‘softening’ to used car values in the coming weeks as consumers hold back on big ticket purchases in the run-up to Christmas
Richard Walker, Auto Trader’s director of data and insights, says he expects used values continue on a similar trajectory into next year, with the semiconductor chip shortage expected to drag into the middle of 2022.
‘What we’re currently seeing in the market is the result of basic economics – exceptionally strong consumer demand and a constrained supply chain which simply cannot catch up,’ he explained.
‘Looking ahead, demand will continue to be fuelled by healthy levels of consumer confidence, a positive shift towards car ownership, and the 1.5 million ‘lost’ car sales in 2020.
‘Add to the fact it’s unlikely we’ll see a strong return on supply levels due to the fall in new car sales volumes over recent years and the lower levels of pre-registration, we can expect strong year-on-year price growth to continue well into next year.’
Walker says he expects to see some ‘slight week-on-week softening’ as we head towards the traditionally quieter festive period and hopes it could help supply and demand levels even out as finance agreements and fleet contracts come to an end.
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