The used car market continues to see record price growth, as supply issues in the new car market have pushed buyers to seek second-hand alternatives.
Online car marketplace Auto Trader has analysed 400,000 adverts and found that in the week commencing August 9, there was a 15.2 per cent year-on-year increase in the average price of a used car.
The figures mark 66 weeks of consecutive price growth, and dwarfs the 5.7 per cent increase recorded in April when dealer forecourts first reopened after lockdown.
To demonstrate how huge demand is right now, Auto Trader says it recorded 15.8 million visits to its platforms, which is a 32 per cent increase on the same week in 2019. Compared with the same period, buyers spent 18 per cent longer browsing and 68 per cent more leads were sent to dealers.
Furthermore, it took an average of 26 days for a car to leave a forecourt, which is 10 per cent faster than a typical April.
The huge increase in demand is being driven by a lack of supply in the new car market, which is largely being caused by the ongoing semiconductor chip shortage. Auto Trader says its research indicates 74 per cent of new car buyers would be willing to get a used alternative if their choice wasn’t available in their desired time-frame.
Auto Trader’s data and insights director Richard Walker said: “Used car demand is being fuelled by many factors, not least consumer confidence, low unemployment levels, concerns about safety on public transport, but also the supply constraints we’re seeing in the new car market.
“We estimate there are up to 600,000 new car transactions that won’t happen this year because of these constraints, with many consumers looking to used car alternatives. This suggests we can expect a sustained period of positive used car demand.”
Walker added that although they expect used car sales to top eight million this year, that will not compensate for the lost sales seen throughout the pandemic.