Older used cars worth more than ever before in “nuanced market”

Used car values have eased from a like-for-like increase of 2.8% year-on-year (YoY) in July, to 1.5% in August.

According to the latest data from Auto Trader’s Retail Price Index, prices have also softened on a month-on-month (MoM) basis, by just -0.1%.

However, Auto Trader said that these headline figures mask an “exceptionally nuanced market”, with a significant disparity between age cohorts and fuel types, which is being driven by large variances in market dynamics.

Older vehicles are outperforming the overall market recording strong levels of price growth. Those aged between 10-15-years-old have seen values increase 11% YoY this month, marking the highest rate of growth in eight months. With an average value of £6,629, these cars are currently worth more than ever before.

The performance is the result of very strong consumer appetite for older and more affordable vehicles, Auto Trader reproted, with the current levels of demand growth for 10-15-year-old cars (up 10.9% YoY) outpacing levels of supply growth (up 7.9% YoY).

Retail prices of younger models have dipped this month, with the average value (£36,862) of ‘nearly new’ models (those aged up to a year-old) contracting -0.5% YoY so far in August. Demand for this age group remains strong, increasing 37.9% on August 2022, but it’s struggling to keep pace with the large volume of cars entering the market, which are up 53.2% over the same period (albeit still down circa 50% on pre-pandemic levels). This is being fuelled by the gradual post-pandemic new car market recovery.

Richard Walker, Auto Trader’s data and insights director, said: “The overall retail market is stable, but as our data illustrates, it’s incredibly nuanced, with large differences in supply and demand across segments causing significant variations in pricing. With supply of younger cars improving, values of sub-five-year-old-cars are largely flat, whilst prices of older, and more supply constrained vehicles, continue to grow. Even at this granular level, there are major variances between fuel-types, which highlights just how critical it is for retailers to follow the data, and not the headlines to inform their pricing and sourcing strategies.”