Our latest analysis of used car prices - October
Despite the current turbulent economic backdrop, used car prices grew month-on-month in October. In fact, according to our Retail Price Index, which is based on daily pricing analysis of circa 900,000 vehicles, average prices were up £178 on September (£17,409) and a significant £548 on August (£17,039).
It marks four consecutive months of positive or neutral month-on-month (MoM) price movements. And whilst October’s rate of MoM growth is slightly behind trends seen in previous years, it follows a particularly strong September, which saw prices surpass seasonal trends.
October also marked the 31st month of consecutive year-on-year growth, with average prices up 8.1% on a like-for-like basis. Although the rate of growth is softening from the all-time-high of 32.2% recorded in April 2022, it is to be expected; a result of the market overlapping last year’s exceptionally strong levels of growth (in October 21, prices were up a then record 25.6% YoY).
Demand softening but speed of sale accelerating
Consumer demand is seeing a similar YoY softening, however any direct comparisons made with 2021 will again be distorted due to last year’s very strong levels (fuelled by pent-up demand post lock-down, and the huge surge in competition for used cars due to new car shortages). According to our latest onsite, the volume of advert views on our marketplace dipped -4% last month against October 2021, but against the more ‘normal’ trading conditions of 2019, views were up 14%.
A further indicator of market health is the speed in which used cars are leaving retailers’ forecourts. The latest data shows that used cars took an average of 25 days to sell in October, which is one day faster than in September. In fact, it marks the fastest days to sell since October 2021 (24 days) and is ahead of pre-pandemic levels. So, whilst consumer demand is easing, levels remain comparatively robust and puts the market in a comfortable position ahead of what is typically the quietest trading period of the year.
Prices far above projections
By applying a longer-term view of the market, it’s clear how rapidly used car prices have grown: indeed, last month the average price of a used car was up 47% on October 2019. The data also offers notable trends at a more granular level, including the growing number of cars (at a derivative level) which are worth more in 2022, than they were when registered two or three years ago. For example, a 2020 1.1 Ti-VCT Zetec Fiesta (petrol) is up £1,327 in just two years.
There are similar examples across other fuel-types and body types, however, some segments are seeing prices fall faster than others. In the case of premium brand, diesel SUVs, for example, the average price of a 2020 2.0 litre R-Sport Jaguar F-Pace has decreased £3,748. Crucially, however, even in terms of these depreciating segments, average prices remain above the level where they would be expected to be under normal trading conditions.