Used car prices in the UK have surged at their most rapid pace since the end of last year, as revealed by fresh data from Auto Trader, marking the 39th month of consecutive growth, as reported by cardealermagazine.co.uk. The average value of second-hand cars in June was £17,756, reflecting a year-on-year increase of 3.2%, the steepest in eight months. Despite a slight drop of 0.3% from May, industry experts attribute this dip to typical seasonal trends, suggesting that car dealers should not be concerned.

According to the data, the cost of buying used cars has risen by £3,900 since the prices started increasing in April 2020. These price escalations are attributed to an imbalance in market dynamics, with supply dwindling by 4.1% year-on-year in June due to the pandemic and the subsequent new car production deficit, and consumer demand rising by 2.3%. As a result, Auto Trader's Market Health metric recorded a 6.7% increase in June compared to the same period in 2022.

Richard Walker, Auto Trader’s director of data and insight, expressed optimism for the remainder of 2023, despite economic uncertainties, due to continued robust consumer demand and engagement. In contrast, the value of used electric vehicles (EVs) has seen a rapid depreciation, with the average retail value of EVs falling by 19.1% to £31,430 in June, marking the sixth consecutive month of decline. However, signs of stabilisation are emerging, with June experiencing the smallest month-on-month price contraction since August of the previous year. The narrowing upfront price gap between many electric models and their ICE counterparts is contributing to this trend.

This significant car dealer news underlines the shifting dynamics in the motor trade news, as the used car market experiences price escalations and the used EV sector undergoes price contraction. It emphasises the importance for car dealers to track these trends carefully to source the most profitable stock for their forecourts.

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