Whereas Auto Dealer’s Retail Worth Index information reveals a slight softening within the progress of used automotive retail values this month, the used automotive purchaser remains to be dealing with worth rises the longer they wait.

The year-on-year improve in July was 2.8%, down from 3.2% in June. Nevertheless, on a month-on-month foundation, common retail costs have risen by 0.3%.

Auto Dealer mentioned the one age group experiencing a contraction in worth is the 1-3-year-old automobiles, with the typical retail worth at present down by 2.0% from final yr. This decline is pushed by the continued drop within the worth of low emission automobiles, which is impacting the typical values for this age group of vehicles.

Specifically, the retail worth of petrol and diesel vehicles aged 1-3 years previous has elevated by 3% year-on-year, whereas their plug-in-hybrid and electrical counterparts have skilled a considerable decline of -15% and -24%, respectively.

Auto Dealer’s director of information and perception Richard Walker mentioned: “Common retail costs have been rising for 40 consecutive months, however because the begin of the yr we’ve seen a gradual acceleration in retail worth progress. Though this has slowed barely, it’s not a sign of a market in reverse, and anybody anticipating a drop in retail costs anytime quickly shall be sorely dissatisfied.

“Regardless of the financial headwinds, demand stays buoyant, which mixed with the continued constraints on new and second-hand automotive provide, will hold retail values steady.

“Rising used automotive costs does have the potential to position added stress on motorists who’re already feeling the squeeze on their family funds. Nevertheless, most automotive patrons needs to be insulated if they’ve a automotive to promote or to trade, because it’s not simply the value of the automotive on retailers’ forecourts which might be rising, so too is the automotive on driveways, and in lots of situations prone to be price significantly greater than anticipated.”

Auto Dealer discovered there are sturdy charges of progress throughout completely different gasoline varieties and age teams, significantly amongst older vehicles. Second-hand vehicles aged over 15 years previous noticed a powerful 8.7% improve in common retail worth in comparison with July 2022, and a 2.6% improve from final month, June 2023. Vehicles aged 10-15 years previous additionally skilled a conservative 1.4% month-on-month improve, however they’ve considerably elevated by 11.1% year-on-year. That is along with the numerous 26.5% year-on-year progress recorded in July 2022.

The expansion is partly because of strong client urge for food, however provide pressures play a big function, with present demand outpacing inventory availability. The constraints in provide of older age cohorts are a consequence of the 2008 monetary disaster, which led to slower volumes of brand-new vehicles coming into the retail market.

Electrical retail values, although nonetheless contracting on a year-on-year foundation, are stabilising because the surge in provide slows down. This aligns with the broader retail market pattern, the place the speed of provide progress continues to outpace client demand progress. Electrical automobile retail costs throughout all ages are down by -20.7% on final yr, with the present worth at £31,622. In distinction, the typical retail worth of used petrol and diesel vehicles, of any age group, has elevated by 5.2% and 5.1% year-on-year, respectively.

The market is displaying indicators of stabilization, with this month recording the bottom degree of month-on-month contraction since August 2022. At -0.1%, it represents a big enchancment from the -0.9% in June, -1.5% in Could, and -1.6% in April. This stabilization is attributed to slowing provide ranges as retailers promote by obtainable vehicles.

Whereas electrical automobiles had been the fastest-selling vehicles till late summer time final yr, they’ve now turn out to be considerably slower than different gasoline varieties. Nevertheless, because of improved provide and demand dynamics and attracting automotive patrons with aggressive costs, EVs at the moment are leaving forecourts a lot sooner. The present velocity of sale, at simply 30 days, is on par with petrol vehicles, making them the joint fastest-selling gasoline kind and the quickest velocity of sale for electrical automobiles up to now 9 months. These constructive developments point out a promising future for the used automotive market, particularly because the market stabilizes and electrical automobiles acquire recognition.

Sue Robinson, chief govt of the Nationwide Franchised Sellers Affiliation (NFDA), added: “The used automotive market continues to operate in good stead; values are rising, provide is enhancing, and demand is powerful. Electrical automobile costs are additionally stabilising which is constructive, the value parity between EVs and ICE has at all times been one of many vital boundaries to adoption for motorists.

“With used EV costs declining and edging more and more nearer to the value vary of client budgets, the info is beginning to present an uptick in demand, opening doorways of alternative for retailers to make the most of this market.”