Used car prices rise for 26 consecutive months

Used car prices increased for the 26th month running in May, with the average cost of a like-for-like vehicle 28.4 per cent higher than it was a year ago.

Figures from Auto Trader show strong continued demand for used cars, using daily pricing analysis of around 900,000 vehicles. Since the first of the Covid lockdowns, used car prices have continued to rise, with many cars jumping in value – some by nearly 80 per cent.

April saw a record 32.3 per cent increase on average, which Auto Trader said reflected a continued slowing of the pace of price growth.

The marketplace site says there are signs of a ‘very gradual return to normal’ but there won’t be a ‘dramatic fall-off in car prices’, because of ongoing supply issues that are leading to lengthy waiting lists for those wanting new vehicles.

Auto Trader says it expects these issues to remain into 2023, due to further disruption caused by Russia’s invasion of Ukraine, while it says retailers are still cutting prices of used cars by lower amounts than they were before the pandemic.

Richard Walker, Auto Trader’s director of data and insights, said: “It is important not to jump to rash conclusions about the health of the market, despite the softening in used car price growth during May. If we compare it with a boom in car-buying after the end of the third lockdown, it is unsurprising that the market might seem weaker, but demand is still solid and looks likely to support pricing for some time to come.

“This is obviously a tough time for consumers and there are further economic hardships to come. But the supply chain issues triggered by Covid and its aftermath mean that there are around two million fewer cars in the market than would have typically been the case – and the problem has been worsened by the crisis in Ukraine. This is a market which is only going to gradually return to normal.”

The top-performing used car in May was the Suzuki SX4, which saw prices rise by a huge 79.8 per cent compared with last year, with an average asking price of £4,162. Used MPVs are continuing to prove popular too, with the Seat Alhambra and Renault Scenic increasing in price by 61.4 per cent to £18,757 and 54.1 per cent to £8,040 respectively in 12 months.

Auto Trader’s data shows that only four cars had a lower asking price than in May 2021 – the Land Rover Discovery 3, BMW 8 Series and 8 Series Gran Coupe and the Mini Roadster, with the last one having the steepest fall in value of 7.2 per cent.