20/04/2018

Used diesel prices continue to increase

According to the latest results from the Auto Trader Retail Price Index, the average price of a second-hand car continued to grow on a year-on-year basis in March, with used diesel prices recording the highest level of growth since May 2015.

The average price of a used car in March was £12,732, a 6% increase on the same period last year on a like-for-like basis (stripping out the impact of changes in the mix of cars being sold1). This is in line with the levels of growth recorded in January and February.

The Auto Trader Retail Price Index combines and analyses data from c. 500,000 trade used car listings every day, as well as additional dealer forecourt and website data (OEM, fleet and leasing disposal prices, in addition to pricing data from over 3,000 car dealership websites and data from major auction houses across the UK), ensuring the Index is an accurate reflection of the live retail market. Auto Trader is the UK's largest digital automotive marketplace, with more than 450,000 cars listed each day.

Used diesel price growth holds steady

Whilst new diesel registrations continue to fall, prices for used diesels are in fact increasing and recorded year-on-year growth of 3% in March on a like-for-like basis (stripping out the impact of changes in the mix of cars being sold1). Though broadly in line with the three per cent growth recorded in January and February, March saw the highest level of price growth since May 2015.

The average cost of a used diesel vehicle on Auto Trader was £14,453 in March, a £53 month-on-month increase and a £905 rise on the £13,548 recorded in March 20172.

However, the proportion of searches for diesel vehicles on the platform decreased in March from 53% to a record low of 51%, as consumers moved towards petrol and alternatively fuelled vehicles. Searches for diesel vehicles have fallen dramatically in recent years, dropping from 71% in November 2016.

On average, 21% of all searches that take place on Auto Trader each month are based on fuel type. Although diesel remains the most searched-for fuel type, the proportion of searches for petrol vehicles increased last month from 43% to 45%.

Growth in used petrol prices continues to outstrip diesel, with year-on-year growth of 10% in March on a like-for-like basis. The average cost of a used petrol car last month stood at £10,712, a £21 month-on-month decrease, but a significant £1,704 jump compared to March 20172.

Commenting on the findings, Karolina Edwards-Smajda, Auto Trader's retailer and consumer product director, said, 'It's encouraging to see yet more evidence that used diesel prices are holding up, both month-on-month and year-on-year, despite lower numbers of new diesel registrations. We list more than 470,000 cars each day on our marketplace, so this is comprehensive data that is clearly pointing towards a resilient pricing environment. However, we have seen price growth start to flatten out, both in diesel and overall, since the end of last year.

'Also, price is only part of the picture. With a sustained decline in searches for diesel on our platform, it's clear that consumer sentiment has been significantly impacted by anti-diesel rhetoric and a lack of clarity about the benefits and drawbacks of diesel vs other fuel types. A huge number of consumers have been deterred from diesel but don't realise that modern Euro 6 technology can be significantly more fuel-efficient, and often more environmentally-friendly, than petrol.'

Record levels of popularity for alternatively fuelled vehicles

The proportion of searches for alternatively fuelled vehicles on Auto Trader (including electric, hybrid, bi-fuel, petrol ethanol and LPG) hit a record high of 5% in March, up from 4% in January and February. The most popular electric model based on search volume was the Nissan Leaf, and the most popular hybrid model was the Toyota Auris.

Karolina continued, 'It's exciting to see that consumers are, albeit slowly, beginning to see alternatively fuelled vehicles as viable options. However, there are still some very real barriers hampering more widespread adoption. Our March market report found that 59% of recent car buyers who chose not to purchase an electric car were put off by the upfront expense. We believe finance will be a key enabler to greater consumer uptake of electric and hybrid cars, but we also need government to step up and offer willing early adopters greater incentives to buy electric.'