Car buyers faced a 14.1% price increase for the average car advertised on Auto Trader in July.
The record increase shows that car dealers across the UK are now reacting decisively to wholesale price increases triggered by an imbalance between supply and consumer demand.
According to the latest Auto Trader Retail Price Index data, the average price of a used car was £ 14,781 in July, as advertised values were in April 16th.
Auto Traders data showed that the rate of price growth doubled in just three months, from a comparatively conservative 7.1% in April.
Richard Walker, Director of Data and Insight for Auto Trader, said, “The fact that the rate of price growth has doubled in just three months is truly incredible and testifies to the extraordinary consumer demand in the market.
“Based on what we are seeing in general, such as high levels of disposable income and savings, as well as improvements in consumer confidence and low interest rates, we have every reason to believe that these levels have the potential to last long. if not all, 2021.
“Also, we have only just begun to scratch the surface of the recovery of the 1.4 million ‘lost’ transactions in 2020 due to closed physical showrooms.
“For these reasons, we are very comfortable revising our forecast for this year at a much higher rate than some commentators have suggested, to around eight million transactions in use.”
Auto Trader’s positive market outlook contrasts with that of Cox Automotive.
Last week, Cox lowered its forecast for 2021 used vehicle sales by a further 0.6% to 6,766,250 as the ongoing impact of COVID-19 and global semiconductor shortages in Nov.
Insight and Strategy Director, Phillip Nothard, said, “Most new car models face shortages or long lead times, adding pressure to the used car market that is lacking in supply.”
Cap HPI reported this week that used vehicle wholesale prices had increased an average of £ 2,125 (16.6%) in each of the past four months, with the growth rate slowing slightly to 3.1% in June, after an increase of 4, 8% in June and an increase of 6.7% in May ..
Sue Robinson, executive director of the National Franchised Dealers Association (NFDA), the momentum in the used vehicle sector led to a positive outlook for retailers. She said, “The continued consumer confidence in most types of vehicles is very encouraging to franchise dealers as it reflects an increasingly healthy economy.
“Although we are seeing some headwinds in the supply of new and used cars due to semiconductor shortages and plant closures, NFDA members remain cautiously optimistic in their outlook for the rest of the year.”
Auto Trader’s consumer demand confidence is based on 67.5 million cross-platform visits in July.
This corresponds to an increase of 29% compared to the same period in 2019.
Consumers spent 10.2 million hours researching their next car on the market – a 22% increase.
The pace of sales among car dealerships also accelerated in July, with the average car taking just 24 days to leave a forecourt – five days faster than in July 2019.
Fewer retailers are adjusting prices for fewer vehicles as they stick to a strong margin.
Auto Trader reported that an average of 2,116 retailers made daily price adjustments in July, 441 fewer than in the same period in 2019.
Retailers reduced sticker prices significantly less, averaging just £ 97, compared to an average reduction of £ 339 in 2019.
Price movement data shows that high-performance and premium cars have attracted the largest price increases.
Consumers could flock to these sectors as the UK’s forced switch to electric vehicles (EV) draws nearer and automakers’ focus on new car production shifts to electrified models.
Audi’s RS3, Mazda MX-5 and Jaguar XKR were among the top 10 most popular cars in July.
In fact, used gasoline and diesel vehicle prices hit record highs on a like-for-like basis in July, up 9.6% YoY (£ 13,409) and 16.2% (£ 15,052).
Electric vehicle price growth last month was a more conservative 9.2% year over year in June to 9.6% (£ 23,303) in July.
