Used car demand has continued to surge since lockdown ended, resulting in used car prices growing at their fastest rate in almost two years.
The average used car now costs £13,888, reports Auto Trader, 4.6 percent more than this time last year.
It is the fourth month running that used car prices have risen.
Auto Trader data director Richard Walker said the increases are due to demand and supply being out of step – customers are out there, but the supply side has taken longer to emerge from lockdown.
While customer demand shows no signs of easing from its record levels, supply constraints are now easing, said Mr Walker.
“We expect the growth rate we’ve seen in recent months to stabilise somewhat, rather than continue to accelerate each month.”
Diesel up, electric down
Auto Trader data (based on analysis of 900,000 vehicles each month) shows it’s petrol cars that are driving prices up.
Average petrol prices rose 5.6 percent in July, although diesel car prices weren’t far behind with 4.1 percent growth.
Diesel car prices actually grew at the fastest rate in almost six years.
Surprisingly, electric car prices actually fell 4.3 percent, as supply starts to exceed demand.
Demand for EVs is up 75 percent in a year – but supply has outpaced this, increasing almost 88 percent.
The still-high price of the average used electric car is probably capping demand at the moment: it is £25,639, more than twice the price of the average petrol-engined car.
Demand for electric cars is expected to grow as models start to become cheaper.
Auto Trader also found demand for vehicles aged 10-15 years surged 23 percent, helped by their affordability.
Ironically, this led prices to actually go up 10.4 percent, to over £4,200. This was not helped, adds Mr Walker by supply actually dropping 16 percent last month.