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Average price of used cars soars 20% in a month

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The average price of used cars has increased by more than 20% in a month.

The rapid rise is blamed on the Covid-19 pandemic and supply chain problems.

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Richard Walker of AutoTrader, which compiled the figures, said:

“What we’re seeing in used car pricing is extraordinary.

“In any normal circumstances a car begins to lose its value as soon as it’s driven off the forecourt.

“However, exceptionally high levels of consumer demand in the market, coupled with new and used car supply constraints, mean what is traditionally a depreciating asset has become an appreciating one.”

A paucity of vehicles and eager customers with money saved during the lockdown are helping push up prices.

Also, fewer people are using public transport.

Mr Walker added:

“While a mere 6.1pc price growth was enough to set records in August 2020, this pales in comparison to last month’s mammoth 21.4pc, the highest ever monthly price increase.

“Not only are we recording a huge surge in consumer demand – fuelled, in part, by the increased levels of household savings, a positive sentiment shift towards car ownership, and the 1.5m ‘lost’ transactions last year as a result of the various lockdowns – but we’re also seeing cars sell faster than ever before.”

 

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