Auto Trader : Used car prices rocket as inflation rate reaches record high

Press release Used car prices rocket as inflation rate reaches record high 17th Nov 2021

As the latest figures reveal inflation hit its highest rate in a decade last month, based on data from the Auto Trader marketplace the record levels of used car price growth shows no sign of easing, with average prices increasing a massive 26.9% last week on a year-on-year (YoY) and like-for-like basis. It marks the 80^th consecutive week of price growth, and an almost four-fold increase in just six months, rising from a now relatively conservative 6.8% in May 2021.

This recent acceleration has been fuelled by the massive levels of consumer demand in the market, which as highlighted on Auto Trader's Market Insight tool, was up 14%[1]last week when compared to the same period[2]in 2019. This is further reflected in the continued growth in cross platform visits to Auto Trader, which last week increased 27% (over 14 million visits) on the same period two years ago. There was also a 14% rise in the hours (2.1 million) consumers spent researching their next car on its marketplace.

Further evidence of this exceptional demand is the faster speed at which retailers are selling cars. Last week it took an average of just 27 days for stock to leave forecourts. Although it's a slight slow-down on the October average of 24, which is a typical season trend, it's 16% faster than the speed of sale recorded in 2019 (32).

Another factor in the surge in prices is the ongoing drop in levels of supply, which were down -8% last week versus 2019. The shortage of micro-chips and other raw materials which is directly and dramatically impacting worldwide supply of new cars is having a significant knock-on effect on the remarketing supply of used cars.

Consumer sentiment survey points to sustained demand

Despite current inflation rates, the latest findings from Auto Trader's consumer sentiment survey, conducted in October, suggest a minimal impact on buying intentions. Out of circa 1,100 car buyers, 22% intend to purchase within the next three months, whilst 43% intend to do so within two weeks, which is up from 41% in September. What's more, 31% of those surveyed believe car ownership is more important today than it was pre-COVID[3], whilst 44% feel more confident in their ability to afford their next car than they did a year ago[4].

These positive indicators, along with wider economic influences, support Auto Trader's prediction that the market will record a total of circa 7.75 million used car sales this year.

Auto Trader's Data and Insights Director, Richard Walker, said: "To see such a huge increase in car prices in such a short period of time is truly remarkable and is indicative of the current perfect storm of exceptionally high levels of consumer demand coupled with very constrained new and used supply channels.

"Although inflation will always pose a threat to demand, based on the positive consumer metrics we're tracking across the retail market, as well as broader economic factors such as the record number of job vacancies reported just this week, we don't anticipate any significant easing beyond normal seasonal trends. Accordingly, with such strong levels of demand, and no end in sight for the current supply challenges, we can expect the strong year-on-year price growth to continue well into next year."

Largest used car price increases and contractions by model as of 8^th - 14^th November 2021

Rank	Make	Model	Average Asking Price	Price Change
1	Land Rover	Defender 90	£79,022	104.2%
2	SEAT	Alhambra	£19,106	49.2%
3	Peugeot	207 CC	£3,331	46.8%
4	Ford	Focus	£15,149	44.2%
5	Renault	Grand Scenic	£9,423	43.9%
6	Land Rover	Defender 110	£79,800	43.6%
7	SKODA	Yeti	£12,268	43.5%
8	Jaguar	XK	£29,101	42.8%
9	SKODA	Octavia	£16,233	42.0%
10	Ford	S-Max	£13,546	41.3%
11	Toyota	Yaris	£12,755	40.6%
12	Peugeot	Rifter	£22,603	40.5%
13	Ford	Kuga	£19,904	39.7%
14	Hyundai	i30	£13,582	39.0%
15	Vauxhall	Zafira Tourer	£11,799	38.4%
16	Ford	Grand C-Max	£11,473	38.1%
17	Kia	Sorento	£20,801	37.1%
18	Ford	EcoSport	£15,773	37.1%
19	Vauxhall	Cascada	£10,575	37.0%
20	Peugeot	2008	£15,556	37.0%
20	Toyota	iQ	£4,013	5.1%
19	Citroen	DS3 Cabrio	£5,972	5.0%
18	Lexus	UX 250h	£31,183	4.7%
17	Citroen	DS3	£5,033	4.6%
16	Vauxhall	Antara	£5,703	4.4%
15	BMW	8 Series	£61,597	3.8%
14	Peugeot	308 CC	£4,640	3.3%
13	Tesla	Model 3	£49,107	1.9%
12	Audi	e-tron	£66,446	1.5%
11	BMW	X3 M	£58,909	1.0%
10	DS AUTOMOBILES	DS 3 CROSSBACK	£22,042	0.4%
9	Audi	A4 Cabriolet	£4,387	-0.1%
8	Volvo	S80	£5,728	-1.0%
7	Mercedes-Benz	CLC Class	£4,331	-2.0%
6	Fiat	Punto Evo	£2,501	-2.4%
5	BMW	8 Series Gran Coupe	£62,402	-2.9%
4	Toyota	Supra	£45,656	-3.1%
3	Toyota	Prius+	£25,765	-13.8%
2	Volvo	XC40	£36,111	-14.6%
1	Kia	Carens	£8,665	-28.1%

[1]Market demand measure, Auto Trader Market Insight

[2]11^th -17^th November 2019

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[4](n=288).