The latest on used car prices

The second quarter has got off to a strong start for the used car market, with April recording growth in consumer demand, transactions, and retail prices. In fact, last month marked the first month-on-month (MoM) increase in a year, with the market recording a 1.1% uptick on a like-for-like basis, with the average price of a used car rising to £16,803 MoM.

 Our Retail Price Index, which is based on 800,000 daily pricing observations, shows that the monthly growth is in line with traditional seasonal patterns; every year since we began tracking used car prices in 2011, April has recorded growth following the March plate change. Although slightly behind the pre-COVID average of around 2.2%, it offers a positive sign of the market returning to historic norms.

Although retail prices remain down on 2023 (-9.3%), the month-on-month uptick is being fuelled by favourable market dynamics. Indeed, whilst the volume of used cars entering the market fell -1.1% year-on-year (YoY) last month, the first contraction in supply levels since the summer, consumer demand on our marketplace was up around 9%, which is the highest rate of growth since December. As a result, Market Health rose over 10% over the same period, also marking the largest increase this year.

The strong demand is reflected in not only the circa 83.7 million cross-platform visits to our marketplace in April (up 8% on 2023), but also the speed in which used cars were sold. It took an average of just 27 days for a used car to leave retailers’ forecourts in April, which is one day slower than March (the fastest pace ever recorded), but two days faster than the same period last year.  

As well as helping to stabilise retail prices, the very robust consumer demand in the market, which has remained constant since the New Year, is also driving sales with used car transactions increasing around 6.3% year-on-year in April.

Reassuringly, our consumer research points to sustained demand, with circa 80% of in-market car buyers surveyed claiming to be as confident in their ability to afford their next car as they were last year. What’s more, 81% of the car buyers surveyed said they were intending to buy their next car within the next 6 months, which is up from 77% the month prior.