The latest on used car prices
The average price of a used car in December was £16,649, down 0.6% Month-on-Month (MoM) vs November, on a like-for-like basis according to the latest data from our Retail Price Index, (RPI) which assesses over 800,000 daily pricing observations from across the whole retail market.
In 2023, prices decreased 2.3% from November to December, mainly due to a drop in trade valuations which led to an impact on pricing, meaning prices were out of sync with what should be a strong market for that time of year. This year’s price movements are more in line with seasonal norms highlighting the more robust market dynamics in 2024.
Additionally, whilst Year-on-Year (YoY) pricing was down 4.1% in December, that decrease is the smallest YoY drop seen throughout 2024, a positive trend as we enter 2025. This also marks the sixth consecutive month where YoY price drops have reduced, the peak was in June 2024 with 10% YoY price drops. The December figures show the average price of a used petrol car down 3.2% YoY at £14,782, diesels down 4.1% YoY at £14,087 and electric vehicles (EVs) priced 10.6% YoY lower at £26,139. The declines in prices of younger cars is mainly impacting the movement of prices overall as there are pockets of strength for some cohorts of vehicles that have strong demand but shorter supply.
In December, cars sold three days quicker than 2023, taking 33 days to leave forecourts, down from 36 in 2023 as robust demand tempers seasonal trends. December speed of sale has been longer in recent years 36 days in 2022 and 34 days in 2021, making 2024 the quickest ever. This highlights that consumer demand is strong and pricing is driving the increased speed of sale albeit at the expense of some margin opportunity.
EVs continued to be the fastest selling fuel type at 28 days, with three-to-five-year-old EVs selling within 24 days on average. Overall, we expect the used EV market to remain robust into 2025, with supply still growing strongly, but demand keeping pace in most vehicle age cohorts. Diesels were the next fastest fuel type at 32 days driven by supply constraints, closely followed by petrol at 33.
Whilst both speed of sale and the volume of site visits to our platform improved YoY, the market softened towards the back end of December. Younger vehicles have seen a big growth in demand, however, there has also been very strong growth in supply so there are pockets of opportunity.
More one-to three year old cars are now being stocked by retailers as we come out of the pandemic, providing many with a good opportunity to get their hands on the latest vehicles compared to a year ago. In addition to this, our data also shows that there is lower demand for ICE vehicles but supply is heavily constrained in this age cohort, so there is an opportunity to make a strong profit for those that can source these vehicles.
December saw both fast speed of sale and resilient volume of site visits to our marketplace, as a result, the data shows a profit opportunity of almost £30 million on under-priced stock that is highly sought after, compared to average market values.
The 2025 outlook is also positive as our forecasts, published last year, show the used car market is expected to maintain the strong growth momentum of the last two years and rise from an estimated 7.61m sales this year to around 7.70m in 2025.