eBay Motors Group reports fourth monthly price drop in May as demand for older cars strengthens
- Average used car prices drop £370 to £16,872 in May
- But prices track at 23% higher, or £3,146, than May 2021
- Cars aged over 6 years generate most online views
14 June 2022 - Average used car prices dipped in May for the fourth consecutive month, while the appetite for older cars increased with a rise in online searches for cars over six years old, according to the latest eBay Motors Group Market View.
The average used car price dropped 2.1% (£370) to £16,872 in May, the biggest drop of the year so far, following a 1.5% drop in April.
However, the continued strength of used car pricing continues to be demonstrated by year-on-year comparisons with prices tracking at 23% higher, or £3,146, than May 2021.
The biggest monthly price drops were recorded by car supermarkets, down 2.5% from £17,317 to £16,890, followed by franchised dealers down 2% from £20,413 to £19,992, while independents dipped 0.9% from £14,833 to £14,708.
With the cost of living crisis impacting household budgets, buyers increasingly focused on older and therefore more affordable vehicles when searching for cars in May.
The most searched ads online were for cars over six years old. The most popular age band was 6-8 years, accounting for 14.8% of all online views, closely followed by 14.2% for 8-10 year old cars.
Even older cars were in high demand with 10-12 years taking 12.4% of views and 12-14 years attracting 10.4% of views.
The lowest ad views were for cars aged under six months at just 0.9%, followed by 6-12 months at 1.4%. Cars aged 1-2 years averaged only 3.2% of views and those aged 2-3 years attracted 3.9% of views.
Days to sell improved across all car retailing sectors, averaging 36.7 days, two days faster than April.
The fastest sales were achieved by car supermarkets averaging 28.1 days, on a par with April, followed by franchised dealers averaging 31.2 days, four days faster than April. Independent dealers remained virtually unchanged month-on-month at 45.3 days.
Further evidence of the appetite for older stock was seen in 6-8 year old cars selling in just 32.9 days, the fastest selling age band after sub-6 months at 24.4 days.
Average overall stock levels were static at 46.1 units, compared to 46.8 in April, reflecting the ongoing challenge of dealers sourcing inventory.
However, car supermarkets saw their average stocks fall 10 units month-on-month to 293, while franchised sites dropped by two units to 56 and independents remained unchanged at 36 units.
"The gradual month-on-month drop in average advertised used car prices is closely tracking the widely reported drops in the wholesale sector* but remain significantly ahead of May last year," said Lucy Tugby, head of marketing at eBay Motors Group.
"The impact of the cost of living crisis can be seen clearly in the sheer volume of views of older cars, especially those aged over six years, as buyers look for the most cost-effective solutions to their immediate motoring needs.
"Consequently, dealers need to be increasingly smarter and flexible in their stocking policies to reflect the ongoing impact of the cost of living crisis on affordability for a growing number of buyers. What we're now seeing is high online interest in these cars resulting in some of the fastest sales. The challenge for retailers over the coming months is to continue to sell these vehicles profitably as their values normalise," said Tugby.
Source: *cap hpi Car Market Overview June 2022 https://www.cap-hpi.com/editorials/view/bb0622