The latest on used car prices
The used car market is entering the final quarter in very robust shape, with the latest data from our Retail Price Index revealing average prices were stronger than seasonal norms in September, while used cars sold at near record pace and retailers sold more stock than this time last year.
Our latest data shows that the average price of a used car last month was £16,450, which is a -0.3% softening on a month-on-month (MoM) and like-for-like basis. Since 2011, when we began tracking retail prices, September has typically seen a contraction of -0.6%.
The sustained levels of consumer demand, combined with the ongoing constraints in used car supply, are fuelling this performance, In fact, whilst stock levels were down -5.4% in September, our data showed that demand on its platform had risen for the third consecutive month, increasing 8% year-on-year (YoY). With demand outpacing supply, cars are selling faster; in September it took an average of just 27 days for cars to leave forecourts, which is one day faster than in August, and four days quicker than last year.
The subsequent result of these metrics is a buoyant retail market. Indeed, according to our data, used car sales in September rose circa 5% on the same period last year, following the same positive trend recorded so far in 2024, which year-to-date has seen a 3.9% YoY increase.
With such strong demand and cars selling at near record pace, retailers are well positioned to price more confidently. However, circa 8,800 retailers are currently advertising around 60,000 cars with a high Retail Rating score below their market average, eroding their collective margin potential by approximately £31 million.
While the market for brand-new electric vehicles continues to struggle, the health of the used EV market is in a more robust shape; demand is strong (up 50% YoY), cars are selling quickly (taking an average of 26 days), and prices are stabilising (down just -0.1% MoM). However, a more granular view of the data reveals the still-maturing used EV market is a game of two halves.
As prices of 3-5-year-old electric cars (£19,221) continue to reach relative price parity with their ICE equivalents (£19,300 ), demand continues to rocket. In fact, demand growth on our marketplace for this cohort was up circa 110% in September (petrol and diesel demand rose and fell 8.8% and -7.8% YoY respectively), whilst on average they took just 19 days to sell, over a week faster than the average used car and faster than any other segment of the market. Despite the ongoing growth in supply (up 118% YoY), such is the huge demand for these cars, prices rose 1.6% MoM in September, the strongest rise of any other segment.
Whilst the ‘middle-aged’ EVs are in many cases cheaper than ICE, nearly new electric models (those less than a year old) are almost £7,000 more expensive. And with brand-new EVs benefitting from an average discount of 11%, the nearly new models are proving to be more of a challenge for retailers to sell: they took an average of 43 days to sell in September, more than twice as long as their 3-5-year-old counterparts, and longer than any other segment.