Strong Demand and Robust Transactions Define the Used Car Market in May
Monday, 3rd June 2024, London – The latest data from Auto Trader reveals a thriving used car market in May, marked by high levels of consumer demand, quick sales, and a notable volume of transactions. The average price of a used car stood at £16,442, reflecting a -9.8% year-on-year decrease and a -0.7% month-on-month decline, aligning with typical seasonal patterns.
Auto Trader recorded an impressive 83 million visits to its platform in May, a significant 11% increase compared to the same period last year, and nearly 20% higher than in May 2022. This surge in engagement is driven by a robust 8.6% year-on-year rise in consumer demand.
The swift turnover of used cars further underscores this demand. On average, a used car took just 29 days to sell in May, one day slower than April but one day faster than May of the previous year. Certain segments experienced even faster sales, with volume brands selling in 27 days and 3-5-year-old cars moving in just 26 days.
While the 9% year-on-year sales increase observed in April slightly declined, Auto Trader’s data shows a solid 6% rise in used car transactions in May, propelled by sustained market demand.
Supply Dynamics: Middle Market Squeeze
After eight months of growth, used car supply dipped by -1.1% in April, continuing to fall by -2.2% in May, the largest drop since June last year. Despite strong supply at both ends of the market spectrum, the middle market faces constraints. Supply of cars less than a year old rose by 39% year-on-year, and stock of vehicles over 10 years old increased by nearly 12%. However, 1-5-year-old car supply fell by -17.3% year-on-year, reflecting the lingering impact of approximately 3 million ‘missed’ sales during the pandemic.
This softening supply, combined with increasing consumer demand, creates a favorable market dynamic, aiding the return of retail prices to seasonal norms. Auto Trader’s Market Health metric, which evaluates market profitability, climbed to 11% in May, up from 10% in April, marking the highest growth rate since July 2023. For stock aged 1-5 years, the metric surged by 36% year-on-year.
Retail Pricing Strategies and Market Outlook
Despite these favorable conditions, many retailers are pricing high-demand stock below market value. Currently, 9,000 retailers are advertising approximately 70,000 cars with a high Retail Rating score below their market average, eroding potential margins and costing around £35 million, or about £4,000 per retailer.
Richard Walker, Auto Trader’s Data & Insights Director, commented, “The used car market has shown remarkable strength in Q2, with stabilizing retail prices, healthy demand, and quick sales. Any slight month-on-month price softening is purely seasonal. Economic indicators such as rising consumer confidence, driven by falling inflation and potential tax cuts, are boosting the market. While the Euros and General Election might cause temporary disruptions in July, our outlook for the year remains positive.”
Sue Robinson, Chief Executive of the National Franchised Dealers Association (NFDA), added, “The resilience of the used car market is evident with increased demand and sales in May. It’s encouraging to see quick sales and stable prices, fostering optimism as we approach the second half of the year.”
Top 10 Used Car Price Growth (All Fuel Types) | May 2024 vs May 2023
| Rank | Make | Model | May 24 Average Asking Price | Price Change (YoY) | Price Change (MoM) |
|---|---|---|---|---|---|
| 1 | Toyota | Land Cruiser | £30,951 | 6.2% | 2.5% |
| 2 | Volkswagen | Beetle | £7,451 | 1.7% | -1.3% |
| 3 | Porsche | Cayman | £30,019 | 1.3% | 1.0% |
| 4 | BMW | M5 | £43,441 | 0.6% | 0.1% |
| 5 | Audi | R8 | £73,394 | 0.1% | -0.7% |
| 6 | Porsche | Boxster | £20,173 | 0.0% | -0.4% |
| 7 | Suzuki | Jimny | £11,808 | -0.3% | -0.6% |
| 8 | Mercedes-Benz | SL Class | £28,527 | -0.5% | -1.5% |
| 9 | Bentley | Continental | £57,788 | -0.6% | -0.1% |
| 10 | Volkswagen | up! | £8,237 | -1.2% | -0.8% |
Top 10 Used Car Price Contraction (All Fuel Types) | May 2024 vs May 2023
| Rank | Make | Model | May 24 Average Asking Price | Price Change (YoY) | Price Change (MoM) |
|---|---|---|---|---|---|
| 10 | Toyota | Prius+ | £18,123 | -21.1% | 0.0% |
| 9 | Land Rover | Range Rover Evoque | £20,819 | -21.2% | -1.6% |
| 8 | Vauxhall | Zafira Tourer | £7,276 | -21.4% | -4.1% |
| 7 | DS AUTOMOBILES | DS 3 | £7,342 | -21.8% | -3.5% |
| 6 | Mercedes-Benz | EQA | £30,504 | -22.0% | -2.1% |
| 5 | Mazda | MX-30 | £18,332 | -22.1% | -3.2% |
| 4 | DS AUTOMOBILES | DS 3 CROSSBACK | £14,140 | -22.8% | -0.4% |
| 3 | Vauxhall | Corsa-e | £15,236 | -23.0% | -1.8% |
| 2 | Nissan | Leaf | £12,739 | -23.1% | -5.6% |
| 1 | Volkswagen | e-Golf | £11,649 | -23.9% | -2.7% |
The used car market continues to show resilience and dynamism, providing a positive outlook for the coming months.
