Auto Trader has said that January’s 7.4% rise in used car values has given it “confidence we’ll see a quick return to health” as COVID-19 ‘Lockdown 3’ restrictions start to ease.
Earlier this week the online marketing platform published a set of KPIs gathered from its online car buyer data which could indicate another post-lockdown sales boom.
At the same time, it reported that January’s rise in car values had been the 10th consecutive month of price rises on the platform.
Today, its Retail Price Index revealed that the latest rise had taken the average value of a used car on Auto Trader to £14,155.
Walker said: “From what we’re observing in the market, the current lockdown is following very similar patterns to what we saw during November’s.
“Price growth is strong, retailers are holding firm, and although sales have no doubt been hit in the short term due to the restrictions in place, all lead indicators of consumer demand remain robust.
“Along with the resilience and solid sales performance we’re seeing among our retailer partners, it gives us confidence we’ll see a quick return to health once the restrictions lift.
“And with the same demand and supply dynamics at play, the data doesn’t suggest any reason for big price corrections or adjustments in the coming months.”
In-line with yesterday’s Society of Motor Manufacturers and Traders (SMMT) January new car registrations data, Auto Trader said that used car retailers had reported operating at 60% to 70% of their usual volumes in January as they leveraged click and collect and click and deliver services to realise sales.
According to data published by Cap HPI this week, trade values declined by an average of 1.4% (£150) at the three-year point last month as the volume of cars sold through trade channels were around 60% of the levels seen in January last year.
But businesses are holding firm with their used car prices as the market balances supply and demand issues carefully.
On average 2,834 retailers made price changes in January, which was 8% fewer than the same period last year, Auto Trader said.
The average daily reduction of pricing at £303 was only marginally lower than last year.
Meanwhile, visits to Auto Trader increased over 4% year-on-year in January, with 60.1 million visits.
The average price of a used petrol car advertised on Auto Trader in January was £12,821, representing a 6.9% YoY increase.
But Auto Trader reported: “It’s a significant easing on the 8.1% growth recorded in December and is due to the current over balance of supply in the market, which increased 11.9% YoY last month, compared to demand, which fell 6.2%.”
Whilst both supply and demand for used diesels fell in January, down -7.4% and -8.6% respectively, Auto Trader reported that like-for-like prices grew 8.8% YoY, dipping very slightly on December’s 9% YoY rise. The average sticker price for a used diesel in January was £14,700.
Electric vehicles (EV) continue to record strong levels of consumer demand on the platform.
Demand for premium EVs increased 65.6% YoY in January but a 250% increase in supply caused prices to dip by 0.9% (£46,226).
Commenting on Auto Trader’s data, National Franchised Dealers Association (NFDA) chief executive, Sue Robinson, said: “It is encouraging that average used car prices remain strong indicating a healthy market with strong consumer demand despite the lockdown, which is also reflected by retailers’ general optimism about car sales in 2021.
“The robust interest in electric vehicles is positive: with a maturing second-hand market, the improving charging infrastructure, and retailers working hard to inform their customers, there are reasons to be confident this trend will continue.”