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UK Used Car Prices Climb In April Due To Strong Consumer Demand
The UK's used car market witnessed a notable shift in April, with the average price of a used car reaching £16,703, marking a 9.3% decrease from the previous year. Despite this annual drop, prices saw a month-on-month increase of 1.1%, aligning with expected seasonal trends. This rise is attributed to a robust demand within the used car sector, which saw transactions grow by approximately 6.3% compared to April of the previous year. Electric vehicles (EVs), in particular, demonstrated strong performance, with 1-3-year-old models experiencing a price increase of 2.5% from the previous month.
According to data from Auto Trader, a leading automotive marketplace, April showcased growth across consumer demand, transactions, and retail prices for the first time in a year. This growth follows the traditional surge post-March plate change. Despite retail prices being lower than those in 2023, the observed month-on-month increase is propelled by favorable market dynamics. Interestingly, while the volume of used cars entering the market dipped by 1.1% in April, consumer demand on Auto Trader surged by around 9%, marking the highest growth rate since December. Consequently, Auto Trader's Market Health metric, an indicator of market profitability, increased by over 10%.
The platform's high traffic further underscores this demand, with approximately 83.7 million visits recorded in April—an 8% increase from the previous year. Moreover, cars were selling more quickly, averaging 27 days on the market in April. This pace is slightly slower than March's record but two days faster than the same period last year.
The positive market performance was not confined to a single segment but was evident across various fuel types. Despite the surging interest in EVs, their average prices saw a minor decrease of 0.4% compared to the previous month. Conversely, both petrol and diesel vehicles experienced an average price increase of 1.3%, despite differing demand levels.
Richard Walker, Auto Trader's Data & Insights Director, commented on the retail market's signs of stabilization and encouraged retailers to leverage Auto Trader's valuations data to seize potential market opportunities. Sue Robinson, Chief Executive of the National Franchised Dealers Association (NFDA), observed that the market is reverting to pre-pandemic levels but highlighted the importance of closely monitoring the maturing used electric market.
In summary, April marked a period of growth for the UK's used car market, driven by strong consumer demand and an uptick in transactions. Electric vehicles stood out for their performance, although their average prices did not reflect this trend during the period.
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