Strengthening the UK’s inflation statistics with our data
It’s a big week for Auto Trader. We’re pleased and proud that for the first time, the Office for National Statistics (ONS) is using our market pricing data to make the UK’s official measures of inflation more robust, including the Consumer Prices Index (CPI) monitored by the Bank of England.
The ONS has already used our figures for experimental estimates, but as of 20th March, for the figures covering February, our data has been fully incorporated into the headline statistics to help represent the movement in used car prices more accurately. It’s a big vote of confidence from the ONS which reflects the huge scale and accuracy of our market pricing data.
The ONS is the UK’s largest independent producer of official statistics and the recognised national statistical institute of the UK; its main responsibilities are collecting, analysing and disseminating statistics about the nation’s economy, society and population. It reports directly to the UK Parliament. The partnership with Auto Trader marks an important milestone in its programme of transforming its consumer price statistics, which includes identifying new data sources - such as our used car pricing analysis. You can read more about the process here.
As part of this transformation, ONS is replacing its offline used car advertised priced surveys with advertised stock data from our marketplace. Prior to the partnership, official inflation in car prices was calculated by tracking a sample of around a hundred different models at three different ages, taken from a manual of industry guide prices. Sometimes it was necessary to estimate prices for some months, which risked missing key trends and behaviours. Using our data will significantly boost the quotes it uses in this area to circa 300,000 monthly price quotes (around 3,000 times more), helping the ONS stay ahead of new trends, and most importantly, to further strengthen the UK’s inflation statistics, something we feel very privileged to support.
The ONS will benefit from the same data set that powers our award-winning valuations, as well as our monthly Auto Trader Retail Price Index, which is based on a daily pricing analysis of circa 800,000 vehicles each day, including 116,000 vehicle updates and an average of 39,000 vehicles added or removed from Auto Trader. Coupled with data from circa 450,000 trade car listings every day, as well as additional retailer forecourt data, the Index is always an accurate reflection of the live retail market.
ONS Consumer Prices Index vs Auto Trader Retail Price Index - comparison between methodologies
While both our Auto Trader Retail Price Index and the ONS’ Consumer Prices Index are based on the same data, there will be variances in the respective headline figures. This is due to different methodologies and independent analytic decisions, such as accounting for outlier vehicles, product grouping, and other calculation differences. It’s reassuring however, that despite two different groups of statisticians and data scientists working on this problem, the resulting estimates are very similar.
Using our data will help make the UK’s official inflation statistics among the most technically advanced in the world. We’re incredibly proud of this partnership, and it represents another example of how the influence of our data and insights extend beyond the traditional automotive industry. In addition to it being used by a number of government bodies and departments to inform policy and forecasts, including the Bank of England, Department for Transport, HM Treasury, Office of Zero Emission Vehicles, and Number 10 itself, our data is used widely in the insurance and finance sectors.
And of course, our data and insights are available to all our retailer partners through our tools, account teams and our insight channels. We believe it is the most powerful way we can support our partners’ success in 2024, and to that end, continue to grow our product and tech teams to deliver even more powerful insights and retailer solutions.