Government’s ‘Plan B’ measures have not slowed the used car price boom

The introduction of stricter measures to combat the spread of coronavirus hasn’t slowed demand for used cars, which continue to see record price increases.

Dealers were largely unaffected by the Government’s ‘Plan B’ measures, but there had been fears that the announcement might cause customers to say away.

However, the latest data from online car marketplace Auto Trader has found that these changes have had little impact on the used car segment, with used car prices up 28 per cent last week compared with the same period last year.

This marks the 84th consecutive week of price growth, which has seen the average price of a used car grow more than £5,000 to about £20,000.

The acceleration in price is believed to be coming from an imbalance in the supply and demand of used cars, with increased demand largely stemming from the low supply of new cars caused by the semiconductor chip shortage.

On top of this, the supply of used cars was down 11 per cent compared with 2019. It is believed this is also down to the new car supply issue as people are holding onto their vehicles longer.

Auto Trader’s data and insights director, Richard Walker, said that there had not been any price increase compared with the previous week, but explained that this was common for this time of year.

He added: “What is far less typical however, is the very strong levels of consumer demand that we’re continuing to track in the market, which even with the introduction of the Government’s Plan B measures, shows no sign of weakening.

“In fact, fuelled by the recovering economy and a resilient labour market, we can expect very strong demand to continue for some time to come. Coupled with the ongoing new and used car supply constraints, these market dynamics will keep used car price growth on its current trajectory well into 2022. Any suggestion, therefore, that any recent easing is anything beyond a normal seasonal trend is simply not correct.”

Last week the Seat Alhambra saw its price increase 48.7 per cent, more than any other car, to £19,159. It was followed by the Renault Grand Scenic (47 per cent/£9,848) and the Ford S-Max (45.5 per cent/£14,833).