Used car market stabilises in December as prices and demand align


Used car market stabilises in December as prices and demand align

The average price of a used car in December 2024 was £16,649, a slight decline of 0.6% month-on-month (MoM) compared to November, according to the latest data from the Auto Trader Retail Price Index (RPI).

The index, which compiles over 800,000 daily pricing observations, reflects a more stable market environment this year, following a significant dip in trade valuations during the same period in 2023.

While year-on-year (YoY) pricing dropped 4.1% in December, this decline represents the smallest YoY decrease seen throughout 2024. December also marked the sixth consecutive month of narrowing YoY price drops, down from a 10% YoY decline in June 2024, indicating a gradual return to equilibrium.

Fuel Type Pricing Trends

Petrol vehicles: Average price down 3.2% YoY at £14,782.

Diesel vehicles: Average price down 4.1% YoY at £14,087.

Electric vehicles (EVs): Average price down 10.6% YoY at £26,139.

The overall price movement continues to be shaped by declines in younger car segments, although pockets of strength remain for vehicle types with high demand but limited supply.

Used cars sold at a record pace in December, averaging just 33 days to leave forecourts, compared to 36 days in 2023, making this the fastest December sale rate ever. EVs led the charge, averaging just 28 days to sell, with three-to-five-year-old EVs moving even faster at an average of 24 days. Diesel cars followed at 32 days, driven by supply constraints, while petrol vehicles took 33 days.

This rapid turnover highlights robust consumer demand and the effectiveness of competitive pricing, though it has come at the expense of dealer margins in some cases.

Post-pandemic trends have resulted in more one-to-three-year-old vehicles entering the market, presenting opportunities for retailers to stock the latest models. While demand for internal combustion engine (ICE) vehicles is lower in this age bracket, constrained supply has created a profit potential for dealers who can source these vehicles.

Auto Trader’s data also reveals a profit opportunity of nearly £30 million on underpriced stock that is highly sought after compared to average market values, emphasising the importance of accurate pricing strategies.

Looking ahead, Auto Trader projects continued growth for the used car market, with sales forecasted to rise from 7.61 million in 2024 to approximately 7.70 million in 2025. The used EV market is expected to remain strong as supply grows, but demand keeps pace across most age groups.

The December figures underscore a more robust and balanced market environment, setting a positive tone as the sector enters 2025 with steady consumer demand, faster sales, and promising growth opportunities.

Commenting, Richard Walker, Auto Trader’s data and insights director, said: “There is plenty to be positive about as we enter 2025 with last year ending on the fastest selling December in years and consumer demand appearing resilient. There’s a trend towards more stable pricing, with year-on-year price drops softening, and so we’re seeing pockets in the market where there is missed margin opportunity. As hardening trade prices squeeze profit this will be even more important to address into 2025.

“The data shows that there is profit opportunity out there for those who use the right tools and information. To unlock success in 2025, ensure your pricing strategy optimises for speed of turn with margin maximisation as a priority.”



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