The latest on used car prices

The used car market maintained its positive trajectory in March, with rising prices, healthy demand, and faster selling times contributing to continued market growth.

The average price of a used car rose to £16,915, up 0.1% month-on-month in March, marking the second consecutive month of price growth. Historically, March has seen used car prices contract by -0.4%, so this increase bucks the trend and demonstrates the robustness of the current used car market.

While overall used car demand grew +1.0% year-on-year, an encouraging indicator of resilient consumer demand, supply increased at a faster rate (+5.7% year-on-year), which has tempered further retail price acceleration.  

Nevertheless, used cars are continuing to sell quickly, with an average of 25 days to sell, down two days from February, signalling strong retail engagement. Petrol cars sold in just 24 days, making them the fastest-selling fuel type. 

The used electric vehicle (EV) market continues to experience significant shifts. Supply of used EVs surged by +54.7% year-on-year, largely due to ex-lease vehicles returning to the industry, outpacing EV demand growth of +35.9% year-on-year. The growing numbers of electric registrations mean supply of used electric stock is only set to increase.   

The imbalance between supply and demand is putting downward pressure on used EV prices (down –1.6% MoM to £25,190), making them a more attractive option for buyers. Prices for petrol and diesel engines rose to £14,849 (up +0.1% month-on-month) and £14,276 (up +0.8% month-on-month) respectively. 

Nonetheless, our analysis suggests that despite improving pricing strategies, a significant portion of retailers are not fully capitalizing on demand, leading to missed profit opportunities. 

Almost all age cohorts of vehicles return to positive YoY price growth this month. Whilst the supply of 3-5 year old vehicles remained constrained, supply of all other segments continued to grow. Despite this, retail prices for 3-5 year old vehicles have now seen price movements of +0.9% year-on-year.