Common used automotive costs elevated by 3.2% in June to £17,756, rising on the quickest price in eight months, in keeping with the newest information from Auto Dealer.

The Auto Dealer Retail Worth Index reveals that during the last 39 months of used automotive value progress, common used automotive costs have elevated by £3,900.

Though retail costs in June softened barely on a month-on-month (MoM) foundation, reducing -0.3% on Might, that is close to to seasonal norms, with costs falling as a lot as -0.9% over the identical interval in 2019.

The energy and stability in second-hand retail values is continuous to be pushed by the imbalance in market dynamics.

Certainly, used automotive provide, which has been affected because the begin of the pandemic and the next shortfall in new automotive manufacturing, was down -4.1% YoY in June, whereas shopper demand was up 2.3%.

In addition to serving to to gasoline value progress, this imbalance is supporting a worthwhile used automotive market, with Auto Dealer’s Market Well being metric recording a 6.7% YoY improve final month.

Richard Walker, Auto Dealer’s director of information and perception, stated: “The used automotive market has loved a powerful first half of the 12 months, with the rise in retail values doing little to dampen shopper demand, which has been mirrored within the very robust ranges of engagement we’ve seen on our market over latest months.

“Though the present well being of the economic system does add a level of uncertainty for the months forward, based mostly on what we’re at the moment monitoring throughout the market, our outlook for the remainder of 2023 stays an optimistic one.”

Prime 10 used automotive value progress (all gasoline sorts) | June 2023 vs June 2022 like-for-like

Prime 10 used automotive value contraction (all gasoline sorts) | June 2023 vs June 2022 like-for-like

Worth parity edges nearer as EV values proceed contraction

Wanting on the pricing information at a extra granular degree, June marked one other month of contraction for electrical autos (EVs), with the common retail worth (£31,430) falling -19.1% YoY.

It’s the sixth consecutive month of YoY decline, with common EV costs falling circa £5,000 since January (£36,179) and almost £9,500 since their peak in July 2022 (£40,728).

The worth contraction represents what continues to be a maturing market getting into a brand new section; finance and leasing phrases of brand-new electrical vehicles purchased three-four years in the past have ended, which has, as anticipated, resulted in a really robust improve in provide over latest months.

Whereas shopper demand for second-hand EVs has been sturdy, up 6% YoY in June, it’s been unable to maintain tempo with the sharp improve in availability – provide progress was up 174% YoY final month.

It’s this imbalance that’s precipitated costs to contract not too long ago, versus any loss in shopper urge for food.

The availability progress ranges are softening nevertheless – June was the bottom degree in 9 months and down considerably on the 303% improve recorded in January.

As such regardless of June marking the very best price of YoY value contraction recorded by the Index, there are robust indicators of used EV values starting to stabilise, with June additionally seeing the bottom degree of MoM value contraction (-0.9%) since August final 12 months. 

The drop in common EV costs is quickly closing the upfront value hole between many electrical fashions and their ICE counterparts, and in some instances, has already made them cheaper.

For instance, a three-year-old electrical Jaguar I-Tempo was £600 cheaper than a historically fuelled F-Tempo in April, however in June the hole grew to just about £2,000.

Following the worth realignments made by Tesla, the common value of a used three-year-old Mannequin 3 (£30,700) is now solely £3,200 costlier than a BMW 3 Sequence of the identical age – down from £3,600 in April, and a whopping £22,000 in August.

The outcome has been a optimistic one, with used Tesla vehicles promoting sooner than every other out there, taking a median of simply 19 days.

Extra broadly, EVs are taking longer to promote than every other fuel-type. Nevertheless, the common variety of days it takes for them to depart forecourts is falling steadily as they turn into ever extra inexpensive, dropping from 42 days in Might, to 38 days in June.

Each petrol and diesel vehicles remained flat over the identical interval at 27 days.

Walker added: “Though EV values are nonetheless contracting, it’s essential to place it into the correct context.

“The electrical market continues to be an immature one, and what we’re seeing is a pure and anticipated correction within the wake of an enormous inflow of inventory over latest months.

“It might be a while earlier than the market reaches an entire equilibrium, however we’re seeing clear indicators of costs stabilising and a few very engaging financial savings for automotive consumers.

“It signifies that for retailers who’re in a position to observe the information, and supply the correct electrical inventory for his or her forecourt, there’s some very robust revenue potential on the market.”