Auto Trader Announces Biggest Drop in Used Car Price Growth Since 2012
The average asking price for a used car advertised through Auto Trader rose 2.76% in July, but the online market said the rate of growth in value declined for the first time since August 2012.
The average value of used cars on Auto Trader fell from Â£ 12,763 to Â£ 13,115 last month, but the online classifieds specialist reported that the rate of price growth is now slowing, dropping 0 , 7% in July – the first “negative growth” for almost three years.
Auto Trader reported the trends as the Society of Motor Manufacturers and Traders (SMMT) reported that the UK used car market had started to show signs of slowing, with volumes down 2.8% to 2 , 03 million in the second quarter.
Yesterday (August 14), when releasing the AM100 Group’s first half financial results, Lookers COO Nigel McMinn said a used car price realignment had an impact on his company.
Lookers saw its pre-tax profits drop 39.7% to Â£ 24.9million (H1 2018: Â£ 41.3million) in the period up to June 30, 2019, and McMinn said : âWe were doing well until the second quarter when the realignment of used car prices, the biggest since 2002, hit the market.
“When you carry 250 million pounds of used car inventory, you can’t help but be affected by it.”
Commenting on the price trends seen at Auto Trader, its director of trade products, Karolina Edwards-Smadja, said: Economic uncertainty, especially as we approach what could be a no-deal Brexit.
âIt is reassuring, however, that it is a certain age group of cars that drives price growth down rather than a general decline of all vehicles.
“Diesel cars have been impacted by the ripple effect of diesel-gate and emissions legislation, which has confused consumers.”
Newer cars, less than five years old, and internal combustion engines (ICEs) have all been affected by the “slowdown,” Auto Trader said in its monthly Retail Price Index report.
Cars aged five and over saw price growth of 1.2% and an average price of Â£ 6,658 in July, while vehicles under five continue the same negative trend as last month, showing price growth of -1.2%.
The decline is more marked for cars in the 3 to 5 year old category, with price growth slipping 2.1%. This is likely due to record sales of new cars in 2016 and the consequence of an influx of inventory in this age group entering the market, as consumers renew financing agreements and return fleet cars.
âWe are experiencing overheating in the three to five year old car market; there is a lot of supply but not as much demand for cars in this age group, so the prices adjust to make them more attractive, âsaid Edwards-Smadja.
“And although consumer confidence is low, there is still an appetite to buy cars which we can see based on the amount of research done on Auto Trader.”
An average sticker price of Â£ 11,579 for a petrol car in July saw the fuel type register its lowest price growth rate since May 2012 – down 0.6% – while a price Average retail price of Â£ 14,394 for a diesel car was down 1.3%. in the growth rate.
It’s a more positive story for Alternative Fuel Vehicles (AFVs), however. The price growth rate for hybrid, plug-in hybrid (PHEV) and electric (EV) vehicles accelerated from 4.9% in June to 6.2% last month, Auto Trader reported.
The average price for the AFV sticker is now Â£ 22,358.
Meanwhile, the price growth rate of electric vehicles (EVs) grew at an even more impressive rate of 9.5% year-on-year – with EV sticker prices more than double those of their ICE counterparts at 26 Â£ 802.
The percentage breakdown of searches by fuel type on Auto Trader remained the same in July.
Gasoline is still the most popular at 51%, while diesels are at 41% and AFVs at 8%.
The most wanted used car in July was the VW Golf, followed by the BMW 3 Series, Mercedes C-Class, BMW 1 Series and Ford Fiesta, according to the release.