Record-high used car prices are showing no signs of easing, with the average second-hand motor now £3,400 more expensive than it was in May.
Experts expect this growth to occur over a 5-year period and not in six months. As motorists are currently paying 29% more for used vehicles than they did a year earlier, experts say that they can anticipate such levels of growth.
The average second-hand motor advertised for sale last month was £17,366, up from £13,504 in November 2020, says the latest data from online retailer, Auto Trader.
Data shows that it’s predominantly seven-seat van-like MPVs purchased by larger families who are the highest risers over the past 12 months.
Used car prices soar: The average second-hand model has costs £17,366 – some £3,862 more than a year ago. Value increases have been greatest for large MPV models with seven seats, like the Ford S-Max and Renault Grand Scenic.
A second-hand vehicle’s average cost rose by 28% in November. This is a record-breaking month for the car market.
Based on the used car price trajectory using data from 2017 to May 2021, Auto Trader says average values were not estimated to reach £17,366 until April 2026.
With the current semiconductor shortage, however, there is no end to demand for used cars and prices are continuing to climb.
Auto Trader’s data is based on the daily advertised pricing for some 900,000 vehicles listed on its site, which it says is down by around 9 per cent year-on-year as motor stocks decline with appetite for used cars remaining at record levels.
These unique demand and supply dynamics also result in a shorter advertisement period. Second-hand cars are often snapped up quickly by their new owners.
The average time used cars remained on the website for 28 days was compared to 31 days in November 2019, a 13-percent increase over two years earlier.
To further highlight the demand for used cars and their high price, over a quarter (24.8%) of “nearly-new” models are listed for higher prices than their brand new counterparts.
Auto Trader reported that November saw the 20th straight month in which second-hand prices have risen.
This figure is more than six times the amount recorded in January 2021 (at 4%), and it’s up from October’s previous record high of 22.8%.
According to AutoTrader, these numbers have proved that the inflated prices of used cars could be coming to an end. Demand for them is said to be at a peak.
Richard Walker, director of data and insights, said: ‘There’s been some suggestion that the period of huge price growth is coming to an end, or we’re finally about to see the bubble burst.
‘Beyond what we’d expect for this time of year however, we’re seeing absolutely no evidence of that being the case.
“Weekly price movements could continue to slow over the coming weeks. However, average prices still remain close to 30% above last year.
“Looking forward, the existing and future supply of used cars will be limited for most of the next year. And with an economy poised to grow, we can anticipate that the robust consumer demand will persist.”
“Simple economics point to continued very strong price rise well into 2022.”
Seat’s Alhambra MPV with seven seats is its biggest mover annually, with used prices increasing by over 50% per year.
Which cars are experiencing the largest rises in used car prices?
In terms of fuel types, due to the imbalance of supply and demand in the market, both used petrol and diesel vehicles are recording exceptional year-on-year price growth, up 29.5 per cent (to an average price of £16,189) and 29.4 per cent (£17,279) respectively.
Prices for both volume and premium electric vehicles also saw significant annual increases, up 27.8 per cent (£25,732) and 10.1 per cent (£48,564) respectively, says Auto Trader.
The top 10 most valuable year-on-year cars based on model type are the three MPV seven-seat models.
The value of the Renault Grand Scenic and other seven-seaters in this segment is being affected by the increased demand for MPVs that are large enough to be used as a family vehicle.
In favor of SUVs, manufacturers have reduced the availability for seven-seat MPVs and instead favored SUVs. But, the Ford S-Max’s rising used value suggests that there is plenty demand
Topping the list is the Seat Alhambra, with average values rising by 49.5 per cent to £18,918, such is the level of demand.
An used Renault Grand Scenic is now worth 44.22%, but Ford S-Max has risen by 41.33%.
Others models soaring in value compared to a year ago include the Mercedes-Benz CLK (up 45.1 per cent), Ford Focus (up 44.1 per cent), Skoda Yeti (up 43.8 per cent) and Peugeot 207 CC (up 43.5 per cent).
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