Advertised used car prices dipped -1.6% in January to their lowest point in 15 months, according to MOTORS’ Market View analysis.
The price of vehicles listed on MOTORS averaged £17,113 following a succession of monthly falls over the course of last year, tracking -10% below their peak of £18,903 in January 2023.
This downward movement illustrates the ongoing realignment of prices in recent months coupled with the impact of fewer younger cars entering the used sector following the slowdown of new sales during the pandemic.
Electric vehicles (EVs) experienced the biggest drop by fuel type, falling -3% month-on-month to £28,215 (-£740) and -17% (-£5,766) year-on-year. Hybrids were down -2% for the month to £24,938, diesel also dropped -2% to £15,475 and petrol by -1% to £16,344.
The growing inventory of older EVs is contributing to an overall reduction in their average price. The biggest drops for EVs were sub 1-year-old examples of the MG ZS, down -11% to £26,355 and the Honda E down -10% to £42,918. While sub 3-year-old Nissan Leaf models were down -9% to £13,754.
Inventory levels dropped month-on-month from 52 to 45 units, a result of dealers stocking up after Christmas Day in preparation for January, while year-on-year levels remained on a par.
These enlarged inventories coming into January meant days to sell increased month-on-month from 37 to 43, although cars sold two days faster than January 2023. Franchised dealers, however, saw their days to sell increase year-on-year from 41 to 43 days, while car supermarkets and independents saw an improvement over the same period.
“January provided a much needed boost in consumer demand for dealers who stocked-up in December, though it brings a fresh set of challenges,” said Lucy Tugby, Marketing Director of MOTORS.
“Consumer demand remains sensitive to pricing and positioning. Franchised dealers experienced a slight increase in days to sell and the stable overall price position masks variations within the data. This highlights the need for dealers to be highly analytical with their data but also focus on ensuring high visibility with consumers and communicating their business messages clearly.
“EV adds a further flavour with challenges from new brands and declining used values. Against this backdrop we believe there are signs indicating a move towards more normalised EV pricing as illustrated by Tesla’s Model 3, which has been one of the used car sector’s fastest depreciating EVs. Although our data identified a -24% drop year-on-year to £32,634, the month-on-month drop was just -3%; this apparent softening suggests it is finding its place in the used car market after a rollercoaster ride which saw values peak at £52,495 exactly two years ago,” said Tugby.