According to the latest data from the Auto Trader Retail Price Index, which is based on daily pricing analysis of circa 900,000 vehicles across the retail market, the average retail price of a used car was £18,119 in January. It marks a 2.7% year-on-year (YoY) increase on a like-for-like basis and the 34th month of consecutive price growth.
There has also been an acceleration in the levels of electric vehicle (EV) supply in the UK which has seen EV retail values fall which is good for those looking for a used zero emissions vehicle and helping with adoption of zero emissions motoring.
Used ICE prices heat up as EV’s continue to cool
As a result of a dramatic acceleration in levels of electric vehicle (EV) supply (surging from just 2% of all used cars advertised on Auto Trader in June to over 6% in January) past consumer demand which has been flattened recently by rising energy prices, used EV retail values recorded the fifth consecutive month-on-month (MoM) decline in January,
EV prices dropped by 2.1% from December to £36,179. Year-on-year, average electric values have fallen by 1.5%. This is in contrast to its petrol and diesel counterparts which both outperformed the wider market at a MoM level. The average values of a used petrol (£16,557) and diesel (£16,650) car increased 0.6% and by 0.4% respectively between December and January. Petrol was up 3.4% YoY and diesel was up 2.5%.
To help correct this trend, and to avoid more than just a small pothole on the road to 2030, more action will be required from both the government and industry. The used EV market will play a vital role in driving the mass adoption of electric cars.
Unless more consumers are prepared to take a risk with second-hand alternatives, new EV targets will be harder to achieve, especially if retailers lose confidence in their used stock, new models will become increasingly difficult to sell.
Encouraging car buyers into used EVs through incentives, marketing and education to demystify them, including helping to correct myths around battery degradation and reliability, will be critical.
Richard Walker, Auto Trader’s Director of Data and Insight, said: “It’s hard to ignore the current political and economic disruption but based on what we’re tracking, it’s having a very limited impact on the retail market.
“Crucially, demand for used cars remains robust, which along with the ongoing constraints in supply, is keeping prices stable, and with it, profits healthy.
“However, as our data highlights, the market is incredibly nuanced and fluctuations in supply or demand can have an impact at a very granular level. It’s critical then, that retailers follow the data carefully to ensure the very best possible margin.”
Sue Robinson, Chief Executive of the National Franchised Dealers Association (NFDA), said: “The used car market has entered 2023 with continued resilience, values have remained stable, and demand is buoyant.
“Franchised and independent dealers selling used car vehicles are looking to the year ahead with optimism after successful trading in January, and there’s little to suggest that there will be any drastic changes to the market any time soon.”