The UK’s used car market experienced a typical seasonal dip in May, with average retail prices softening by 0.7% month-on-month to £16,825, according to Auto Trader’s latest Retail Price Index.
This marked the second consecutive month of flat year-on-year pricing, following a prolonged period of contraction.
Despite the price adjustment, consumer demand remained robust. Auto Trader recorded more than 84 million visits in May, a 2% increase compared to the same period last year.
This sustained interest contributed to a 1% year-on-year rise in used car transactions, with independent retailers experiencing a more pronounced uplift of approximately 4.2%, driven by heightened appetite for older vehicles.
A closer examination revealed significant variations across different vehicle age segments.
Demand for cars aged over 10 years surged by 10.4% year-on-year, while five to 10-year-old vehicles saw a 4.5% increase.
These cohorts also recorded price growth, with over 10-year-old cars appreciating by 2.6% to £6,555, and 5 to 10-year-old models rising by 1.4% to £13,705.
Conversely, demand for newer vehicles declined, with one to three-year-old and three to five-year-old cars experiencing year-on-year demand drops of 2.4% and 9.1%, respectively.
The market’s overall health is further evidenced by the speed of sale.
Used cars took an average of 30 days to sell in May, consistent with the same month last year and a day faster than in 2023.
Notably, five to 10-year-old vehicles sold the quickest, averaging 28 days, while one to three-year-old cars took longer, averaging 34 days on forecourts.
Fuel type preferences also shifted, with demand for used electric vehicles (EVs) increasing by 31% year-on-year.
This surge was attributed to a 7.4% year-on-year drop in average EV prices, bringing the average cost down to £24,370.
In contrast, demand for diesel vehicles declined by 9.7%, and petrol vehicles saw a marginal decrease of 0.5%.
The data indicated a nuanced market landscape, where older, more affordable vehicles are gaining popularity, and EVs are becoming more accessible due to price reductions.
Marc Palmer, head of strategy and insights at Auto Trader, said: “Although a slight softening on the strong first quarter of the year, we’ve seen a flatter but nonetheless robust used car market so far in Q2.
“Retail prices are stable, demand is healthy, cars are selling at pace, and on our platform, we’re seeing huge volumes of highly engaged car buyers.
“For those retailers able to source sufficient quantity and quality of in-demand stock, this is proving to be a strong combination, with overall transactions ahead of where they were last year.
“The market may be very nuanced, but there are clearly areas of profit potential available, and so I’d urge retailers to make full use of the tools and data we’ve developed to spot the best opportunities for their forecourts.”
