Used car prices continue to break records but show signs of stabilising

Used car prices reached record levels again in February, but experts said there are signs that they are stabilising.

The average price of a used car was £17,929 in February, an increase of 31.9 per cent year-on-year.

The data comes from online car marketplace Auto Trader, which said that a ‘slight easing in the levels of growth is to be expected’. However, this is not a sign of a reversal in the upward trend, with ‘potential headwinds’ that could affect prices including growing inflation and the war in Ukraine.

The incredible trend for used cars costing more than new models continues, with Auto Trader reporting that one in five ‘nearly new’ models now have a higher value than their brand new equivalents.

This is largely being caused by huge wait times for new models as manufacturers struggle to build vehicles because of the semiconductor chip shortage.

Richard Walker, Auto Trader’s director of data and insights, said: “Despite some early indications that the huge acceleration in price growth that we’ve been tracking since the spring of last year is starting to stabilise, no one should be mistaken into thinking this is the start of a fall in prices. Far from it.

“Used car values have been affected by strong levels of consumer demand in the market, combined with the ongoing new and used supply constraints, neither of which show any sign of slowing.

“Any suggestion therefore of a bubble bursting is based on pure speculation, and not the data, which clearly points to very high prices remaining for quite some time to come.”

Demand for used electric vehicles was much higher than for petrol and diesel models last month, up 42 per cent for volume brands and 19 per cent for premium brands.