Used car prices: cost of second-hand cars soars amid shortage of new vehicles
The price of used cars has soared by as much as 30 per cent in the last year as buyers turn to second-hand vehicles in the face of new car shortages.
Figures from separate online selling platforms show year-on-year growth of between 17 and 30 per cent, with Auto Trader reporting that the rate of growth has doubled in the last three months.
Prices have risen almost constantly for the last year and a half and some models are now selling for nearly 50 per cent more than in August 2020.
Auto Trader has even reported some nearly new models selling for more than the brand-new list price as buyers struggle to find the car they want.
According to Auto Trader’s latest retail price index, the average used car price has jumped by 17.2 per cent compared with August 2020, reaching £16,062. Not only is that the single biggest month-on-month increase (up from 14.1 per cent in July) but it is also double the growth rate recorded in May.
Rival used car platform Motorway.co.uk reported even strong growth over the last year, with values on its site jumping 29.5 per cent between August 2020 and August 2021, to an average of £18,836.
Auto Trader’s director of data and insight, Richard Walker, said the growth showed little sign of slowing. She commented: “For the rate of price growth to double in just three months is really quite incredible and is testament to the exceptional levels of consumer demand in the market.
“Based on what we’re seeing more broadly, such as the strong levels of disposable income and savings, as well as improving consumer confidence and low interest rates, we have every reason to believe that these levels have the potential to remain for much, if not all, of 2021.”
Both platforms said ongoing supply problems in the new car market were helping push up demand for used vehicles. New car registrations in August were down 22 per cent, following from an even weaker July.
In June and July dealers were hit by staff shortages after the “pingdemic” saw thousands of people told to self-isolate by the Covid tracking app. However a larger ongoing problem has been the global semiconductor shortage that has seen many manufacturers reduce or halt production and limit model choice, leading to stock shortages for dealers.
Alex Buttle, director of Motorway.co.uk: “Ongoing production issues continue to blight new car sales, stifling supply and stretching delivery times.
“Many buyers who would typically buy new are being driven away by long wait times, and are pointing their wallets instead towards the second-hand car market.
“As a result of this shift in buyer sentiment, demand for used cars is at an all-time high, pushing prices up significantly across the spectrum of makes, models and price brackets.”
While average values have risen between 17 and 30 per cent, both Auto Trader and Motorway reported values for some makes and models had jumped by almost 50 per cent.
Auto Trader’s biggest grower in August was the Jaguar XK sports car, with the average asking price of £26,447 representing a 48.3 per cent increase. The Jeep Grand Cherokee (34.2 per cent) and Mazda MX-5 (33.9 per cent) were also among the best performing models on the site last month.
Motorway saw growth of up to 26 per cent on the Volkswagen Golf GTD and 22 per cent on Land Rover Discovery Sports but some brands enjoyed even greater growth. Values for used Hondas are now 59 per cent higher than they were in August 2020, with Toyotas (50 per cent) and Peugeots (48 per cent) also performing exceptionally well.