Record inflation in the UK accompanied by a 29% rise in the price of used cars
Record inflation in the UK was accompanied by a further 29% year-on-year increase in the value of used cars in January, according to data published by Auto Trader.
The Online Car Market Retail Price Index report says the average price of a car advertised on its portal hit £20,340 last week, marking an increase of £4,200 in just six months.
Continued vehicle supply shortages and strong customer demand were again credited for what was a 93rd straight week of price growth on Auto Trader.
Last month’s price increases also came as UK inflation hit its highest rate in three decades, with the rate hitting 5.5% last month.
Auto Trader‘s chief data and insights officer, Richard Walker, said: “While inflation will always be a potential headwind for demand, based on the positive consumer metrics we are following in the retail market , as well as broader economic factors such as falling unemployment. rate and record number of vacancies, we do not expect a significant slack anytime soon.
“As a result, with such high levels of demand and no end in sight for the current supply challenges, we can expect strong year-on-year price growth to continue through the mid of the year.”
Demand from car buyers for an out-of-favour MPV segment, with OEMs now focusing on SUVs and electric vehicles (EVs), has seen a number of family models re-emerge as the UK’s best-loved vehicles the last week.
The Seat Alhambra, Ford S-Max and Renault Grand Scenic are among the most successful.
At the other end of the scale, near-new models, the Cupra Formentor and Porsche Taycan EV, emerged as the most depreciated cars on Auto Trader – albeit by just 2.7% and 5.4% – while the Mercedes-Benz G-Class finished as the worst performer on the platform. with a drop of 22.6%.
Auto Trader said an average selling time of just 26 days — a slight slowdown from the 25-day average recorded in February 2020 before COVID — was an indicator of strong consumer demand.
Additionally, its recent consumer sentiment survey suggested that 26% of 4,100 respondents intend to purchase a vehicle within the next three months, while 37% intend to do so within two weeks. , compared to 35% in December.
Nearly a third (32%) of respondents think car ownership is more important today than it was before COVID, while more than half (51%) feel more confident in their ability to afford their next car than a year ago, which marks the highest figure since June 2021, Auto Trader added.