September’s inventory boost didn’t stop used car price growth
Used car inventories rose 4.7% in September, but improving supply did nothing to dampen price growth.
According to CarGurus’ latest Used Car Availability Index, the average number of used vehicles on sale jumped 6.2% from August and 28.6% year-over-year. the other.
Kevin Roberts, Director of Analytics and Industry Analytics for CarGurus, said: “There was hope that August could be a turning point in the current chip shortage that is currently plaguing the global automotive industry; however, that hope came and went with the reality that a 2021 resolution is not likely.
“Seasonal changes as well as some exogenous shocks led to changes in the narrative as we tilted into the third quarter. However, the underlying uncertainty caused by high demand and limited supply remains.
While CarGuru’s report shows inventory levels rose in September, Roberts said that was likely due to both a cyclical drop in used sales in September as well as the gasoline shortage at the time. end of the month, which could have led consumers to delay their purchases.
He continued: “A trend that continued and accelerated in September was the increase in average listing prices. Average second-hand price rose 6.2% to £17,928; the figure is even more impressive compared to last year, with prices up 28.6%. With the assembly of new vehicles likely to remain impacted in 2022, it is likely that we will see additional price increases in the coming months. »
Record increases in the value of used cars in September were hailed as a “black swan event” by Cap HPI, with valuations manager Derren Martin describing the seventh consecutive month of price increases as “extraordinary”.
The valuations provider’s market analysis showed live valuations saw an average increase in values of 5.9% – the equivalent of £860 – over three years, 60,000 miles and said a such an increase was not expected.
In monetary terms, the rise was the highest ever recorded by Cap HPI, eclipsing the 6.7% rise in June’s monthly figures, which equated to £825.
Another data point, highlighted by CarGurus, that has continued to accelerate is days on market, which fell to 56 days in September – an 8.8% drop from August and a down 18.4% year-on-year.
Seasonal declines in second-hand sales could help strengthen second-hand inventory somewhat in the fourth quarter, according to Roberts. However, with new production still affected, he said gains would likely be modest, if any, and average listing prices could rise if consumer demand remains strong.