The used car market has started off the year strong despite economic turbulence, according to Auto Trader. Cars are selling at a record pace, engagement on the platform is reaching seasonal highs and retail prices continue to stabilise.
Auto Trader’s Retail Price Index reveals the average retail price of a used car (£16,774) was flat in January on a MoM and like-for-like basis; a contrast to the -1.9% recorded in January 2024.
Richard Walker, Auto Trader’s Data & Insights director, said: “The year ahead will hold some unique challenges for the industry, but our data should offer some optimism for 2025 – demand is robust, prices are stable, and cars are leaving forecourts at a record pace.
“And despite some negative rhetoric, based on the solid market fundamentals we’re tracking, we don’t see any significant or immediate threat to consumer appetite for used cars.”
Stability in retail prices is the result of the ongoing post-COVID squeeze in used car supply (down -3.1% year-on-year in January) along with strong consumer demand. With around 87.1 million cross-platform visits to Auto Trader last month, audience level has seen a 24.8% increase on December (the highest number of visits in a January ever recorded).
Demand is translating into sales while performance improved with the final weeks of January recording a strong increase over the same period last year. Overall sales in January were a relatively flat -1% YoY.
With strong levels of consumer appetite, the rapid turnaround of stock will be at the potential expense of margin opportunity. Around 61,000 high demand used cars are currently being priced below their true market value, according to Auto Trader, resulting in over £24 million in potential margin being missed (around £3,000 per retailer).
Walker said: “It’s disappointing though for retailer profitability performance to see potential margin still being missed with too many cars, including some of the most desirable stock, being under-priced.
“With so many buyers returning to their next car research following the festive period, there’s a big opportunity for retailers over the coming months.”
