Used car price growth hit another all-time high last month as prices increased 17.2 per cent year-on-year.
To give an idea of how much the used car market is booming right now, that represents a record month-to-month increase – prices were up 14.1 per cent in July – and is also more than double the rate of growth recorded in May, when prices were up 8.1 per cent.
These price increases have been steadily growing over the past few months and are being driven by huge demand for used cars. This itself is coming from supply issues in the new market as manufacturers struggle to build cars because of the semiconductor computer chip shortage, as well as pent up demand from pandemic lockdown periods.
The data comes from online car marketplace Auto Trader, which analyses around 900,000 adverts on its site to see trends. In August, it saw 70.2 million visits across its platforms, up 36.4 per cent on pre-pandemic figures in 2019.
Commenting on the results, Auto Trader’s director of data and insight, Richard Walker, said: “To put the price movement into context, in August 2020 average prices were increasing at a rate of six per cent year-on-year, which at the time marked a new record.
“Whilst few could have imagined a year later, growth would be accelerating at nearly three times that rate, we’ve said throughout the pandemic that we anticipated sustained levels of growth fuelled by the strong consumer demand in the market, even when other commentators predicted a collapse in prices.”
In its latest consumer sentiment survey of 2,200 car buyers, it found 26 per cent believe car ownership is more important than before Covid, while half said they felt more confident they could afford their next car than a year ago.
The Jaguar XK saw the biggest price growth in August, going up 48.3 per cent to an average of £26,447. This was followed by the Jeep Grand Cherokee, up 34.2 per cent to £20,704 and the Mazda MX-5, up 33.9 per cent to £13,091.