Abundance of used petrol vehicles in the market puts pressure on prices
- Searches across Auto Trader are up 10% year-on-year indicating interest remains high
- Used diesels holding value despite negative rhetoric
- Limited supply of AFVs continue to drive price growth
According to the latest results from the Auto Trader Retail Price Index the average price of a used car in the UK was £13,322 in November, up from £12,567 during the same period in 2018. However, removing the impact of stock mix (changes in the types of vehicle entering or leaving the market), on a like-for-like basis prices are contracting at a rate of -3.5%.
Revealingly, at 6.9%, the level of stock mix impacting last month’s average prices was at its highest since April 2018 (7.4%). It reflects a wave of more expensive vehicles entering the market, such as SUVS and alternatively fuelled vehicles (AFVs), which are in turn pushing average prices up.
The impact of supply and demand
Supply and demand are also a factor, especially amongst second-hand low emission cars. Not only have the number of searches for pure electric vehicles (EVs) on Auto Trader increased 73% since November 2018, but the Renault ZOE was identified as 2019’s fastest selling used car; the first EV to top the list. However, despite their popularity, pure electric currently represent just 0.5% of all vehicles advertised on the Auto Trader marketplace, compared to 52% petrol and 45% diesel. As a result, the average sticker price of used EVs continue to grow at a far higher rate than their ICE counterparts; in November the average cost was £24,820, equating to a significant like-for-like increase of 16.6%.
For AFVs more broadly (including EVs), prices averaged at £22,115 in November; a 4.9% like-for-like increase on the same period last year. Underpinning the growing consumer appetite for greener engines, Auto Trader data reveals AFVs were the fastest selling fuel type for retailers last month, taking an average of just 52 days to leave UK forecourts, versus 55 for petrol and 56 for diesel.
Newer petrol cars driving prices down
The Index shows that average used petrol prices are contracting at the highest rate annually: -4.7% (£11,967) like-for-like. A more granular view of the data reveals that second-hand petrol cars aged up to one year are largely responsible for driving their overall price down, declining at a like-for-like rate of -8.9% in November. Indicative of the ‘overheating’ in the market, on Auto Trader there are 64,508 petrol vehicles of this age: 77% more than diesel (36,453) and a huge 4975% more than EVs (1,271).
On a more general level, despite the demonisation of diesel, used prices of this fuel type have largely flattened out. At £14,374, average prices are decreasing at an average of just -0.2% like-for-like.
Commenting on the findings, Ian Plummer, Auto Trader’s commercial director, said: “The scale of our data provides us with a clear view of the influence the various market forces are having on used car prices, not least supply and demand. The sustained anti-diesel rhetoric we’ve seen over the last few years has had a profound effect on the overbalance of used petrol vehicles in the market, which is impacting both prices and sales. That same negative rhetoric, which forced retailers to offer enticing deals on diesels, has helped drive a resurgence in their popularity, which isn’t only reflected in the latest quarterly sales figures, but in their average sticker price too.
“These same factors are having a profound effect on low emission vehicles. Whether new car registrations, used car sales, search or speed of sale, every metric indicates a growing appetite for electric. However, with EVs representing such a small share of the current market and a question mark hanging over the impact Brexit will have on the supply of second generation EVs into the UK, it’s highly unlikely average prices will be dropping any time soon.”
Search volumes point to healthy consumer appetite
Evidence shows that despite economic uncertainty, consumers’ search behaviours haven’t wavered. Searches across Auto Trader are up 10% year-on-year, suggesting interest remains high but lower consumer confidence means car buyers are taking longer to choose their next vehicle than they otherwise would.
The percentage of fuel type altered again in November. Petrol cars are most popular, accounting for half (50%) of all searches by fuel type, up from 48% the previous month. Searches for diesel cars accounted for 42% (down from 43% in October) while searches for AFVs remains the same at 8%.
About the Auto Trader Retail Price Index
The Auto Trader Retail Price Index is published monthly and provides an overview of the latest price and search data from our marketplace. Our team of data scientists monitor over 1.9 million vehicles each day, including 90,000 vehicle updates and an average of 19,000 vehicles added or removed from Auto Trader. Coupled with data from circa 450,000 trade car listings every day, as well as additional retailer forecourts and website data (OEM, fleet and leasing disposal prices and pricing data from over 3,000 car dealership websites and data from major auction houses across the UK), ensuring the Index is an accurate reflection of the live retail market.