Being the fourth consecutive month of price growth, this reflects the strong level of demand in the market. This demand does not show any signs of declining into August. Two months after showrooms in England were allowed to reopen, the Auto Trader marketplace continues to record an average of over two million visits each day. In July, there were a record 64.4 million cross platform visits.
The growth in prices is being driven by the strong performance of used internal combustion engine (ICE) vehicles, especially petrol, which last month saw average prices increase 5.6% (£12,604), marking the highest rate of growth since October 2018. Diesel recorded a similarly strong performance, with average prices increasing 4.1% (£14,705), the highest rate of growth since September 2014.
Supply and demand dynamics have a huge influence on price movement. Whilst ICE vehicles are recording high demand and low supply, the opposite is true for their low emission counterparts. As highlighted in Auto Trader's Market Insight analytics, available to all retailers, the demand for pure electric vehicles (EV) has increased 75.2% year-on-year, while supply has overtaken it, up 87.7%. As a result, the average price of an EV in July fell - 4.3% to £25,639. Whilst alternatively fuelled vehicles (AFV) more broadly fared a little better, contracting at a rate of -1.1% (£22,508), marking five months of contracting prices.
Strong growth across all vehicle ages
Taking a more granular view of the market, due to growth in demand outstripping supply, price increases were recorded in every price band of used car. Demand for vehicles aged 10-15 years saw a year-on-year growth of 23% in July, while supply fell by -16%. This resulted in vehicles aged 10-15 years recording the highest price growth among any age group, surging 10.4% (£4,254). In contrast vehicles up to 12 months naturally had the lowest, at 2.6% (£26,500).
In terms of premium and volume brands, both saw demand outstrip supply last month. As a result, both saw an increase in average prices, with premium recording an average growth of 1.8% (£20,779) and volume 9.8% (£9,143).
Commenting on the results, Auto Trader's director of data and insight, Richard Walker, said: "Over the last few months, used car prices have benefited from high demand in the market whilst the supply side has emerged more slowly from lockdown. Even when auctions reopened, the supply of new stock in the market has been slow to return to pre-COVID-19 levels, whilst demand has remained at record levels.
Source: Auto Trader