Prices drop after 41 months

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【Summary】Used car prices fell for the first time in 41 months in September, with the average price dropping 0.4% compared to the previous year. However, second-hand electric vehicle prices remained stable after 13 months of decline, due to increased consumer demand. The director of data and insight at Auto Trader encouraged retailers to focus on the growing market for used electric cars, stating that the volume of these vehicles entering the market will continue to increase.

FutureCar Staff Oct 05, 2023 9:17 AM PT

According to data from the Auto Trader Retail Price Index, used car prices experienced a decline in September, marking the first decrease since March 2020. The average price of a used car last month was £17,736, representing a year-on-year and like-for-like drop of 0.4%. This decline brings an end to an impressive streak of 41 consecutive months of growth in used car prices.

On the other hand, the prices of second-hand electric vehicles are showing signs of stabilizing. After 13 consecutive months of contraction, prices remained flat in September at £32,142. This stability can be attributed to the soaring consumer demand, which increased by 86.7% last month. Interestingly, this is the first time since July 2022 that demand has surpassed supply growth (which was up by 56.8%).

Richard Walker, the director of data and insight at Auto Trader, emphasized the positive outlook for used electric vehicles. He urged retailers not to be swayed by the Prime Minister's unexpected U-turn and highlighted the ongoing de-fleeting of the many electric vehicles sold in recent years. Additionally, the confirmation of the Zero-Emission Vehicle (ZEV) mandate indicates that the volume of used electric cars entering the market is set to increase. Walker advised retailers to focus on the data, as electric vehicles are here to stay and offer good profit potential.

Walker also noted that the recovery in new car sales has led to an increase in supply in the used car market. This increase in supply has triggered the first overall contraction in second-hand prices in over three years. However, he emphasized the importance of considering the context and not being misled by headlines. Despite the overall softening of figures in the coming months, the market remains profitable due to robust levels of price growth driven by strong demand and limited supply.