Used car market showing signs of post-lockdown boom

The average price of a used car was up in February compared with the same month in 2020, suggesting high demand for car buying could be unleashed when lockdown ends.

Auto Trader has analysed the daily price of around 900,000 cars on its marketplace over the past month, where the average cost of a car was £14,096, representing a like-for-like increase of 6.6 per cent.

This represents an 11th consecutive month of price growth, while visitor levels to the site were up 8.8 per in the last week of February year-on-year.

It appears that buying intention is high, too, with the number of leads being directed to dealers up almost 33 per cent.

Richard Walker, Auto Trader’s director of data and insight, said: “This sustained level of price growth, coupled with the strong consumer metrics we’re recording on our marketplace, gives us cause for optimism of very strong retail demand once forecourts are able to physically reopen next month.

“Add to the mix growing economic confidence, as well as the current operating performance of most retailers, we believe there’s good reason for a positive outlook for the weeks ahead.”

Auto Trader said dealers were reducing prices by a daily average of £271, which was just £4 less than the same period last year. Considering the country is in a national lockdown, the marketplace says this a sign of the current market stability.

Although price changes and demand for petrol and diesel models remained relatively steady, electric vehicles saw big increases. Demand was up almost 19 per cent for volume EVs and 48 per cent for premium EVs.

During national lockdown periods, car dealers have been forced to close their doors, relying on online sales only. Vehicles can still be delivered or collected from designated areas away from the showroom.