Used car prices continue to surge with record increase in June

The average price of a used car in the UK continues to surge following the 15th consecutive month of price growth.

In June, the average price was £14,276 according to data from the Auto Trader Retail Price Index. That marks a year-on-year increase of 11.1 per cent, which is also the highest single month-on-month price growth ever recorded by the Index, up from 8.1 per cent year-on-year in May.

Auto Trader says the price growth is being driven by huge customer interest, as seen in a big increase in traffic to the online marketplace. It says it registered 66.6 million cross platform visits, which is up 34 per cent on the same period in 2019, while consumers spent 10.1 million hours researching their next car on the platform, up 25 per cent.

Further evidence of this demand is the fact it took an average of 23 days for new stock to leave forecourts, five days quicker than the same period in 2019.

Commenting on the results, Auto Trader’s director of data and insight, Richard Walker, said: “Whilst supply constraints have compounded the situation, this massive acceleration in used car price is being driven by record levels of demand in the market.

“We’ve barely started to catch back the 1.7 million ‘lost’ transactions in 2020 while retailer showrooms were closed. Coupled with the strong levels of disposable income and savings, as well as improving consumer confidence and low interest rates, it’s safe to expect very high demand to continue for the rest of this year.

“The steep trajectory we’ve been recording will begin to balance out as pressure on supply channels eases and the current levels of demand soften. However, we have every confidence we’ll see strong levels of price growth for a good period of time to come.”

Despite diesel sales struggling in the new market, demand is still fairly high with used vehicles. Used diesel models saw a 13.1 per cent year-on-year increase in June to £14,706, up from a 10.2 per cent increase in May.