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Used Car Prices Remain Stable In July Amidst Rising Sales
The average price of a used car in July was £16,419, reflecting a -9.8% decrease year-on-year and remaining stable month-on-month. This stability aligns with seasonal trends. Despite the General Election and major sporting events, demand for used cars remained strong, with transactions rising by about 1% year-on-year.
Auto Trader's data indicates that retail prices stabilised in July due to robust demand and a softening supply. Prices were level with June on a month-on-month basis, marking the strongest pricing performance in three months and the second strongest since April 2023.
Auto Trader’s data, based on around 800,000 daily pricing observations, shows that 'middle-aged' cars saw significant price growth in July. Cars aged 1-3 years increased by 0.4% month-on-month, while those aged 3-5 and 5-10 years rose by 0.2% and 0.1%, respectively.
Supply constraints continue to affect the market broadly. The volume of available stock decreased by 5% year-on-year in July, marking the fourth consecutive month of decline and the steepest fall since last year. However, consumer demand remained high, with Auto Trader visits up by 2.1% year-on-year and used car transactions estimated to have risen by about 1%.
While supply remains strong at the extremes of the market, it is constrained in the middle. Stock for cars under a year old rose by 37% year-on-year, and those over ten years old increased by 13%. However, supply for cars aged 1-5 years fell by -18.5% year-on-year in July.
This imbalance between supply and demand is creating favourable market dynamics, particularly for middle-aged cars. Auto Trader’s Market Health metric showed a year-on-year increase of 30% for cars aged 1-3 years and 33% for those aged 3-5 years.
Retailers Pricing Below Market Value
Despite favourable conditions, many retailers are pricing high-demand stock below market value. Around 8,900 retailers are advertising approximately 63,000 cars with high Retail Rating scores below their market average. This practice is eroding margins and could potentially cost around £31 million.
Richard Walker from Auto Trader commented: "We continue to see a complex and nuanced used car market, but the underlying fundamentals remain robust." He added that demand continues to outpace supply, which should help stabilise prices over the coming months.
Consumer Demand Remains Strong
Sue Robinson from the National Franchised Dealers Association noted: "Despite some ongoing challenges, notably the supply squeeze, Auto Trader's data shows that the health of the used car market remains solid." She highlighted that prices are stable and consumer demand is strong.
{TABLE_1}{TABLE_2}The imbalance between supply and demand has also accelerated sales speed; cars left forecourts faster in July compared to June and July last year. Middle-aged cars sold particularly quickly due to high demand outstripping limited supply.
The Auto Trader Retail Price Index provides an overview of price trends based on data from around 800,000 vehicles monitored daily. This index helps reflect live retail market conditions accurately.
Auto Trader Group plc is the UK’s largest automotive platform listed on the London Stock Exchange since March 2015. It aims to drive change responsibly through its diverse culture and partnerships while promoting environmentally friendly vehicle choices.
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