Retail prices remain buoyant in May
- Seasonal downturn had less impact in 2019 compared with previous years
- Used car market remains buoyant but rate of growth has slowed
- Average price of EVs and AFVs nearly double that of ICE counterparts
Used car prices in the UK continue to grow despite Brexit and economic uncertainty, albeit the rate of growth has slowed to 0.8%, the slowest since December 2016. This continuing shift in price, which we’ve seen throughout 2019, means average sticker prices are £12,775.
The latest findings from the Auto Trader Retail Price Index show that diesel cars had the slowest growth rate in May at 0.4% and an average sticker price of £14,163. While petrol cars have seen price growth of 1%, with an average retail price of £11,174.
Meanwhile, alternative fuelled vehicles (AFVs) continue to outdo both powertrains at 4.8% growth and an average sticker price of £21,663 nearly double that of its internal combustion engine (ICE) counterparts. Specifically, electric vehicles (EVs) are the stand-out performer; price growth is still in double digits at 11.8%, and they continue to rise in average price, £23,771 - the highest on record.
Challenging the negative rhetoric
“There has been much rhetoric around the strength of the used car market in recent weeks, namely that prices have plummeted however, Auto Trader data tells a different story. Prices are still growing, it’s just that the rate of growth is slower than we’re accustomed to and that we’ve seen in recent months,” explains Karolina Edwards-Smajda, Auto Trader’s Director of Commercial Products.
Looking at circa three-year-old stock with around 60,000 miles on the clock, it’s clear the seasonal trend has an impact annually, driven by the March registration plate change. Month-on-month impact on price is down 3.56% which is less severe than we saw in 2018, 2017, 2012 and 2011.
Edwards-Smajda continues: “There is a clear trend every year following September and March plate change, resulting in an increase in three-year-old, 60k vehicles. The used car market has an influx of stock, often as a result of consumers trading in their car for a new one. Following the March plate change, the volume of three-year-old cars reaches its peak between March and June. This saturates the market and prices become more competitive – which is what we observed happening in May. This is part of the annual cycle, and it’s a trend we see every year.”
Searches for AFVs reaches all-time high
The number of people searching for AFVs has increased to an all-time high, with 8% of all fuel related searches on Auto Trader for the fuel type this month. Petrol has lost the share gained by AFVs, accounting for 51% of all fuel related searches. Searches for diesel remains flat at 41%.
Stock in the market
The continued surge in prices of low-emission vehicles can be attributed to supply and demand. On Auto Trader, the UK’s largest automotive digital marketplace, AFVs currently account for just 1% of stock listed, whilst petrol and diesel account for 52% and 47% respectively.