The used car market continues to show resilience as it heads into the final quarter of 2024, bolstered by strong consumer demand and faster sales. According to the latest data from the Auto Trader Retail Price Index, the average price of a used car in September stood at £16,450, reflecting a year-on-year (YoY) decrease of -8.4%. However, this figure represents only a marginal -0.3% month-on-month (MoM) decline, which is stronger than the typical seasonal softening of -0.6% usually observed in September. This minor contraction highlights the underlying strength of the market, supported by sustained consumer demand.
Auto Trader’s platform recorded 82 million visits in September, marking a 9% YoY increase. The spike in demand, coupled with a supply shortage (down -5.4% in September), has allowed used cars to leave forecourts at near-record speed, averaging just 27 days to sell—a day faster than in August and four days quicker than last year. This trend indicates a buoyant retail environment, with used car sales in September up approximately 5% from the same period in 2023.
Retailers Urged to Maintain Margin Potential
Despite the strong fundamentals, retailers are cautioned to stay aligned with retail data to avoid margin erosion. As of September, around 8,800 retailers were advertising approximately 60,000 cars with high Retail Rating scores but below market-average prices, collectively missing out on £31 million in potential profit. Richard Walker, Auto Trader’s Data & Insights Director, noted, “2024 has been consistently strong, and as we enter the closing months of the year, it’s very reassuring to see no indication of that trend softening.” He warned retailers against following wholesale price trends, which could lead to substantial margin loss, as seen in previous years.
Electric Vehicles Outperform the Market
In the used electric vehicle (EV) market, 3-5-year-old electric cars continue to outshine the rest of the sector. With prices averaging £19,221—nearly on par with internal combustion engine (ICE) equivalents—demand for these vehicles has soared, increasing by approximately 110% in September. This surge has contributed to a 1.6% MoM price rise for this segment, the strongest of any market category. On average, these EVs took just 19 days to sell, significantly faster than both their ICE counterparts and other used cars. Despite a 118% YoY increase in supply, consumer interest in this category remains high.
However, the nearly new EV segment (less than a year old) presents a more challenging landscape for retailers. With prices nearly £7,000 higher than new EVs and an average discount of 11% on brand-new models, nearly new EVs are taking longer to sell—an average of 43 days in September, more than twice as long as their 3-5-year-old counterparts.
Sue Robinson, Chief Executive of the National Franchised Dealers Association (NFDA), commented on the positive outlook for the used EV market, stating, “The resilience of the used car market remains evident as we head into the final quarter of 2024. It is promising to see an increase in demand for used electric vehicles, particularly in the 3–5-year-old category, highlighting the developing market and shifting consumer preferences.”
Top Performers and Decliners in September 2024
Among the top-performing used cars in September, the BMW M5 led the pack with an average price of £39,979, reflecting a 2.7% YoY increase. Other strong performers included the Porsche Cayman and Volkswagen up!, which also saw modest price gains. On the other hand, some EV models continued to experience price contractions. The DS Automobiles DS 3 saw the largest YoY decline, dropping -23.5%, followed by the Mercedes-Benz EQC (-23.4%) and the Vauxhall Corsa-e (-23.2%).
As the used car market remains in robust shape heading into the final quarter of 2024, retailers have the opportunity to capitalise on strong demand, particularly in the electric vehicle segment. By staying aligned with retail data, they can optimise pricing strategies and preserve vital margin potential, ensuring continued success in a competitive landscape.
