UK: Surging demand and supply crunch drive robust used car market in H1

Lower stock and high customer demand mark thee first six months of the year.

Used cars data, UK H1

Angel Sergeev

By: Angel Sergeev

Jul 4, 2024 at 3:55am ET

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As the year's second half kicks off, the used car market is witnessing an impressive surge, driven by rising consumer confidence and favourable market dynamics. This has accelerated car sales and stabilised retail prices, creating a vibrant marketplace.

Since the beginning of the year, consumer demand for used cars has shown remarkable strength, and there are no signs of a slowdown. In June, Auto Trader reported a 12.4 per cent year-on-year increase in advert views and search activity, marking the highest growth rate in 15 months.

The robust demand is underscored by a staggering 80.8 million cross-platform visits to Auto Trader in June, a 10 per cent increase from June 2023 and a notable 21 per cent rise from 2022. This surge in interest translates into faster sales, with used cars selling in just 29 days on average, three days quicker than last year and five days faster than pre-pandemic 2019.

More than just browsing, consumers are closing deals. Auto Trader's retail sales data indicates that used car transactions in June rose by approximately 8 per cent compared to June 2023, building on a solid 6 per cent year-on-year increase in May.

More UK used car data:

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Ford Fiesta named UK's best-selling used car in Q1

“As we enter the second half of the year, our data shows that the fundamentals of the used car market remain solid; consumer demand is robust, and cars are selling at pace, which combined with the softening in supply, means retail prices continue stabilising. Although this balance of market dynamics is working to return retail prices to seasonal norms, it’s also affecting retailers’ traditional stock profiles and making the job of finding profitable cars all the more challenging,” Richard Walker, Auto Trader’s Data and Insights Director, commented.

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However, this growing consumer demand coincides with a dip in supply. While the influx of used cars began improving late last year, the past quarter has seen a slowdown, with June recording a 4.2 per cent year-on-year drop in available stock, the largest decrease since May 2023.

Particularly hard-hit are cars aged below five years, with those aged 1-3 years and 3-5 years dropping by 20.6 per cent and 16.7 per cent respectively. Conversely, nearly new cars (those under 12 months old) saw a 42 per cent year-on-year increase in supply, thanks to normalised production levels. This imbalance between soaring demand and shrinking supply has bolstered the used car market's resilience.

Source: AutoTrader

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