Used car prices climbed in July 2020 to a monthly high since August 2018, despite the lasting global effects of Coronavirus.
According to the latest data from Auto Trader’s Retail Price Index, which is based on pricing analysis of circa 900,000 vehicles every month, July saw the largest monthly increase in used cars prices since August 2018. The average sticker price of a used car last month was £13,888, which marks a 4.6% year-on-year increase on a like-for-like basis, and the fourth consecutive month of price growth.
According to Auto Trader, demand on its website has been sustained at record highs throughout July and does not show any signs of declining into August. Two months after showrooms in England were allowed to reopen, the Auto Trader marketplace continues to record an average of over two million visits each day. In July, there were a record 64.4 million cross platform visits.
The growth in prices is being driven by the strong performance of used internal combustion engine (ICE) vehicles, especially petrol, which last month saw average prices increase 5.6% (£12,604), marking the highest rate of growth since October 2018. Diesel recorded a similarly strong performance, with average prices increasing 4.1% (£14,705), the highest rate of growth since September 2014.
Supply and demand dynamics have a huge influence on price movement. Whilst ICE vehicles are recording high demand and low supply, the opposite is true for their low emission counterparts. As highlighted in Auto Trader’s Market Insight analytics, available to all retailers, the demand for pure electric vehicles (EV) has increased 75.2% year-on-year, while supply has overtaken it, up 87.7%. As a result, the average price of an EV in July fell – 4.3% to £25,639. Whilst alternatively fuelled vehicles (AFV) more broadly fared a little better, contracting at a rate of -1.1% (£22,508), marking five months of contracting prices.