Used cars' ‘strong price growth’ ahead after 30.5% December surge

Auto Trader has predicted “continued strong price growth” in the used car sector following a 30.5% surge in values during December.

The online marketing platform said that strong consumer demand throughout the festive period had driven the rise in the final month of last year – marketing a 21st consecutive month of growth.

Its data reflects that of digital retail software specialist GForces, which saw a 32% year-on-year (YOY) increase in online sales for car retailers in the two weeks over the Christmas and New Year Period.

Used car values reached an average of £17,816 in December, Auto Trader said.

Vehicles aged less than 12 months old increased 45% in value last month, when compared with December 2019, reaching an average price of £34,429.

The growth left a quarter of ‘nearly new’ cars priced above their brand-new equivalents.

Richard Walker, Auto Trader’s director of data and insights, said: “2021 was a remarkable year for the automotive industry. Used vehicle pricing saw double-digit growth and used cars flew off the forecourts in record time.

“Despite ongoing restrictions, our sector has remained resilient in the face of significant challenges and is on track for strong continued price growth well into the second half of the new year.

“The two main factors fuelling this growth, supply constraints and strong consumer demand, both show no signs of easing anytime soon.

“Claims of an imminent ‘bubble burst’ are failing to take these key dynamics into account.”

In an exclusive interview with AM this morning (January 11), Pendragon chief executive Bill Berman said that he saw no signs of a slump in used car pricing on the horizon, as new car supplies continue to limit vehicle availability.

Discussing the AM100 group’s restructure of its CarStore used car division he said any decline in values would be “steady and predictable” as new car volumes began to rise.

In the meantime, Auto Trader claims that car retailers with access to stock will continue to benefit from rising values as consumer demand shows no sign of slowing.

Auto Trader said that its cross-platform visits increased 27% compared to 2019 in December, with the average number of hours spent on the platform surging 20% compared to pre-pandemic levels.

It said that new and used car enquires grew by 8% and 71% respectively throughout 2021, meanwhile, as heightened demand contributed to faster sales.

In December, the average used car sold 28% faster than in December 2020 (32 days vs. 41), according to Auto Trader.