Confident outlook for the year ahead as healthy demand sends used car prices upwards in January
According to the latest data from the Auto Trader Retail Price Index, which is based on daily pricing analysis of circa 900,000 vehicles across the retail market, the average retail price of a used car was £18,119 in January. It marks a 2.7% year-on-year (YoY) increase on a like-for-like basis, and the 34th month of consecutive price growth.
Although the rate of YoY pricing growth is continuing to slow (now at the lowest rate since exiting Covid lockdown in May 2020[1]), it builds on the massive 31.3% recorded in January last year and highlights the continuing robustness of the market. And highlighting just how steeply and quickly average used car values have climbed, the average price in May 2020 was a comparatively low £13,931; over £4,000 less than average values today. Following the seasonal slowdown over the festive period, January also saw average prices increase on a month-on-month basis, rising 0.2% on December.
The current stability in used car prices continues to be driven by the combination of robust consumer demand, and the ongoing squeeze in supply. This is reflected in Auto Trader’s marketplace data, which shows that whilst the volume of cross platform visits increased 14% last month against January 2022 (the third consecutive month of YoY growth), while supply[2] fell by -5% over the same period.
Demand for older stock sends prices skywards
A good indicator of market health is the speed in which used cars are leaving retailers’ forecourts. Auto Trader’s data shows that used cars took an average of 40 days to sell in January, which is just one day slower than last year (39), but faster than pre-pandemic averages[3]. On average older cars were leaving forecourts the fastest in January, with those aged 10-15 years taking just 35 days, whilst 5–10-year-old-cars took a similarly above market average of 36. The slowest age cohort to sell, however, was 1-3-year-old-cars, which took an average of 47 days.
Looking at the pricing data at a more granular level, the growing demand for older and cheaper stock is not only resulting in a faster speed of sale for older age cohorts, but also stronger levels of price growth. Those cars aged 10-15 years old (which had an average value of £6,325 last month) increased 0.5% between December and January, and on a year-on-year basis, were up a whopping 10.9%. Younger cars, however, have followed a trajectory more aligned to the broader retail market, with those aged up to a year-old (£36,640) increasing 0.2% MoM, whilst 1-3-year-old cars (£28,019) dropped -0.3%.
Used ICE prices heat up as EV’s continue to cool
As a result of a dramatic acceleration in levels of electric vehicle (EV) supply (surging from just 2% of all used cars advertised on Auto Trader in June, to over 6% in January) past consumer demand which has been flattened recently by rising energy prices
To help correct this trend, and to avoid more than just a small pothole on the road to 2030, more action will be required from both the government and industry. The used EV market will play a vital role in driving mass adoption of electric cars, and unless more consumers are prepared to take a risk with second-hand alternatives, new EV targets will be harder to achieve - if retailers lose confidence in their used stock, new models will become increasingly difficult to sell. Encouraging car buyers into used EVs through incentives, marketing and education to demystify them (including helping to correct myths around battery degradation and reliability) will be critical.
Uptick in consumer confidence points to used car stability in 2023
Despite the uncertain economic and political back drop, consumer confidence continues to show signs of improvement. In fact, both the YouGov[4] and GFK[5] consumer confidence trackers reported an uptick in December. This is reflected in Auto Trader’s own consumer research, which shows that more than three quarters (78%) of the circa 1,900 in-market car buyers surveyed in January are planning on buying in the next six months, and 27% in the next three months. What’s more, over 80% of visitors to Auto Trader’s platforms are at least as confident as they were at this time last year in being able to afford their next car. This percentage has stayed strong for UK car buyers on Auto Trader over the last six months.
Commenting on the data, Auto Trader’s Director of Data and Insight, Richard Walker, said: “It’s hard to ignore the current political and economic disruption, but based on what we’re tracking, it’s having a very limited impact on the retail market. Crucially, demand for used cars remains robust, which along with the ongoing constraints in supply, is keeping prices stable, and with it, profits healthy. However, as our data highlights, the market is incredibly nuanced, and fluctuations in supply or demand can have an impact at a very granular level. It’s critical then, that retailers follow the data carefully to secure the very best margin possible.”
Sue Robinson, Chief Executive of the National Franchised Dealers Association (NFDA), added: “The used car market has entered 2023 with continued resilience, values have remained stable, and demand is buoyant. Franchised and independent dealers selling used car vehicles are looking to the year ahead with optimism after successful trading in January, and there’s little to suggest that there will be any drastic changes to the market any time soon.”
Top 10 price growth (all fuel types) | January 2023 vs January 2022 like-for-like
Ranks | Make | Model | Jan 23 Average Asking Price | Price Change (YoY) | Price Change (MoM) | |
1 | Mercedes-Benz | S Class | £37,089 | 20.4% | 1.5% | |
2 | Hyundai | i10 | £8,358 | 19.7% | 0.0% | |
3 | Fiat | Panda | £5,765 | 18.7% | 1.5% | |
4 | Fiat | Tipo | £11,591 | 18.6% | -0.6% | |
5 | Kia | ProCeed | £15,480 | 18.4% | 0.2% | |
6 | Toyota | Avensis | £5,825 | 17.9% | 2.7% | |
7 | Renault | Scenic | £5,843 | 17.9% | 1.9% | |
8 | Renault | Grand Scenic | £7,897 | 16.9% | 6.1% | |
9 | Hyundai | ix20 | £8,979 | 16.8% | 3.1% | |
10 | Citroen | Berlingo | £13,029 | 16.6% | 0.5% | |
Top 10 price contraction (all fuel types) | January 2023 vs January 2022 like-for-like
Rank | Make | Model | Jan 23 Average Asking Price | Price Change (YoY) | Price Change (MoM) | |
10 | Suzuki | Vitara | £14,786 | -9.0% | 0.1% | |
9 | MINI | Paceman | £9,861 | -9.1% | -2.1% | |
8 | SKODA | Yeti | £9,893 | -9.4% | -1.0% | |
7 | Mitsubishi | Eclipse Cross | £16,213 | -10.3% | 0.7% | |
6 | Vauxhall | Crossland X | £12,617 | -10.3% | 0.0% | |
5 | Hyundai | ix35 | £7,076 | -10.9% | -0.8% | |
4 | Jaguar | XK | £20,167 | -11.1% | -1.3% | |
3 | Land Rover | Discovery 4 | £18,300 | -11.8% | -1.5% | |
2 | Vauxhall | Grandland X | £15,829 | -12.8% | 0.3% | |
1 | Jaguar | I-PACE | £48,613 | -15.6% | -4.1% | |
[1] Average prices increased 1.9% year-on-year in May 2020
[2] Determined by the volume of advertised stock on Auto Trader
[3] It took an average of 42 days for a car to sell in January 2019
[5] https://www.gfk.com/press/UK-Consumer-confidence-up-two-points-in-December
-ENDS-
About the Retail Price Index
The Auto Trader Retail Price Index (RPI) is published monthly and provides an overview of the latest price and search data from our marketplace. Our team of data scientists monitor circa 900,000 vehicles each day, including 116,000 vehicle updates and an average of 39,000 vehicles added or removed from Auto Trader. Coupled with data from circa 450,000 trade car listings every day, as well as additional retailer forecourts and website data (OEM, fleet and leasing disposal prices and pricing data from over 3,000 car dealership websites and data from major auction houses across the UK), ensuring the Index is an accurate reflection of the live retail market. Accordingly, as of February 2023 the Office for National Statistics (ONS) will use this data to feed its measures of inflation, including the Consumer Prices Index.
About Auto Trader
Auto Trader Group plc is the UK and Ireland's largest digital automotive marketplace. Auto Trader listed on the London Stock Exchange in March 2015 and is now a member of the FTSE 100 Index.
The marketplace sits at the heart of the vehicle buying and selling journeys, with the largest number of car buyers and the largest choice of trusted stock. Auto Trader exists to Drive Change Together. Responsibly. It aims to grow both its car buying audience and core advertising business and is focused on changing how the UK shops for cars by providing the best online car buying experience, enabling all retailers to sell online. It aims to build stronger partnerships with its customers, use its voice and influence to drive more environmentally friendly vehicle choices and create a diverse business and inclusive culture.
Auto Trader publishes a monthly used car Retail Price Index which is based on daily pricing analysis of circa 900,000 vehicles, this data is used by the Bank of England and ONS to feed the broader UK economic indicators such as inflation and the CPI.
For more information, please visit https://plc.autotrader.co.uk/
FAQs
What will january inflation be in 2023? ›
Inflation is likely to peak soon around 8% as rising interest rates dampen domestic demand and fuel prices moderate. The tight labor market and higher wage growth likely will keep inflation above 4% through 2023.
What will the inflation rate be in 2023? ›All agencies predicted that CPI inflation in 2023 will be 0.8-1.5% higher compared to the Federal Reserve target of 2%.
What is the latest RPI rate? ›The retail prices index is the older measure of inflation between the two and typically comes out highest. In December 2022, RPI was higher than CPI: RPI – 13.4%
What is the next CPI release? ›Please note that the indexes for the past 10 to 12 months are subject to revision. _______________ The Consumer Price Index for January 2023 is scheduled to be released on Tuesday, February 14, 2023, at 8:30 a.m. (ET).
What is the US inflation forecast for next 5 years? ›Basic Info. US Expected Change in Inflation Rates: Next 5 Years is at 2.90%, compared to 2.90% last month and 3.10% last year. This is lower than the long term average of 3.20%.
What will inflation be in December 2023? ›Annual inflation fell to 6.5% in December, the sixth consecutive month of decline. The slowing economy is likely to bring the yearly rate down to 3.2% by the end of 2023. However, this will still be higher than the Federal Reserve's target of 2-2.5%, so the Fed will not be cutting short-term interest rates this year.
What is the interest rate forecast for 2023? ›In its fiscal forecast, published in November 2022, the OBR predicted that the Bank Rate would rise from 1.6% in Quarter 3 2022 to 4.8% in Quarter 3 2023 and 4.5% in Quarter 3 2024.
What will be the inflation rate over the next 12 months? ›The annual inflation rate for the United States is 6.5% for the 12 months ended December 2022 after rising 7.1% previously, according to U.S. Labor Department data published Jan. 12. The next inflation update is scheduled for release on Feb. 14, 2023, at 8:30 a.m. ET.
What is the projected prime rate for 2023? ›“Altogether, while the Fed is projecting a year-end 2023 fed-funds rate range of 5%-5.25%, market expectations based on federal funds futures are at just 4.25%-4.5%. Our forecast is lower still, at 3.75%-4%.”
How long will interest rates rise 2023? ›Many housing market watchers say they're hopeful that interest rates already hit their peak last year. However, others say the increases will likely continue into at least early 2023 until inflation is under control.
What will RPI be in 2023? ›
But what about 2023? Their median expectation of the rate of inflation over the coming year was 4.8% (dropping to 3.4% in the 12 months after that, and 3.3% in five years' time). That's less than half the most recently reported CPI inflation rate (10.7%) and well below current RPI inflation (14%).
Is RPI likely to increase? ›The rate of inflation will reach “astronomical” levels in the next year according to a leading think tank, with the retail price index, the cost-of-living measure often used by trade unions in pay bargaining, climbing to 17.7%.
What is the current RPI and CPI? ›The Retail Prices Index (RPI) is no longer classified as a National Statistic because the way it is calculated does not meet international standards. It is included here as it is well-known and is the longest running measure of inflation. The CPI inflation rate was 10.5% in December 2022, down from 10.7% in November.
What is the latest CPI increase? ›Over the last 12 months, the all items index increased 6.5 percent before seasonal adjustment.
What are the latest CPI figures? ›- NSA -0.3% in Dec 2022.
- SA -0.1% in Dec 2022.
- NSA +6.5% since Dec 2021.
10. When Consumer Price Index (CPI) data released? Explanation: Figures of CPI-based inflation are issued every month in India. But WPI based figures related to primary commodities, fuel and electricity released on weekly basis while other figures are released on monthly basis.
What is the predicted inflation rate For 2024? ›$1 in 2020 is equivalent in purchasing power to about $1.18 in 2024, an increase of $0.18 over 4 years. The dollar had an average inflation rate of 4.25% per year between 2020 and 2024, producing a cumulative price increase of 18.12%. The buying power of $1 in 2020 is predicted to be equivalent to $1.18 in 2024.
Will inflation continue to rise 2024? ›Sun Showers: Inflation settles at 3-4% through 2024 as supply chain disruptions persist and the labor supply remains somewhat constrained.
Will inflation get worse in 2023? ›Fed officials expect inflation to slow in 2023, although they believe it will take a few years to reach the central bank's target of 2 percent annual inflation over time, according to the Fed's most recent economic projections. Officials also expect the unemployment rate to rise to 4.6 percent by the end of 2023.
What will the COLA increase be for 2023? ›Social Security benefits and Supplemental Security Income (SSI) payments will increase by 8.7% in 2023. This is the annual cost-of-living adjustment (COLA) required by law. The increase will begin with benefits that Social Security beneficiaries receive in January 2023.
Will there be a recession in 2023? ›
The labor market is cooling down, putting less pressure on wages, while housing prices and new construction have both declined. Unfortunately, this slowdown in economic activity will likely come with a cost: According to Bloomberg's December 2022 survey of economists, there is a 70% chance of a recession in 2023.
Will interest rates go down again in 2024? ›When interest rates go up, so do mortgage rates. The average rate on a five-year fixed mortgage rate is forecast to rise by 0.3 per cent this year, rising further to just over one per cent next year, and over two per cent in 2024.
Will interest rates go down in 2024? ›But looking forward, NAHB expects mortgage rates to fall below 6% by 2024. “Falling rates will set the stage for a housing rebound later in 2023, and a better affordability environment will lead to a recovery of housing demand,” said Dietz.
How long will interest rates stay high? ›However, many industry experts believe within 18 to 24 months rates will be back to a more 'palatable' level. Somewhere like 2.5% to 3.5% for example. We can't expect rates to reduce as low as what we have been seeing in recent years, which in the industry we refer to as 'covid low' rates.
What is the highest inflation rate in US history? ›Inflation Rate in the United States averaged 3.29 percent from 1914 until 2022, reaching an all time high of 23.70 percent in June of 1920 and a record low of -15.80 percent in June of 1921.
Do prices go down after inflation? ›inflation will fall as quickly and dramatically as it rose. We've seen it happen before.” In other words, prices could drop all of a sudden. Blinder also adds that raising interest rates won't be the end-all solution to lowering inflation.
What will be inflation rate after 15 years? ›Inflation is assumed to be 7%. For example, to find how much is Rs. 1 crore in 15 years use the division factor of 2.8. That means, Rs 1 crore today will be worth (1 crore/2.8) approximately Rs.
Will interest rates go down in january 2023? ›"Mortgage rates will decline slightly but end up higher overall across 2023. Expect interest rates to continue to rise and mortgage rates to reach their peak over the summer above 10%."
Will interest rates go down in 2023 USA? ›Nadia Evangelou, senior economist and director of forecasting at the National Association of Realtors (NAR), is forecasting that mortgage rates will drop below 6% in the spring and summer months of 2023. She cites easing inflation and smaller rate hikes by the Federal Reserve as the reasons the drop is likely.
How high is prime rate expected to go? ›US Prime Rate Forecast is at 5.76%, compared to 5.75% last quarter and 5.76% last year.
How many rate hikes in 2023? ›
However, the Fed sees broadly sees one or two more hikes than the market does in 2023 currently taking rates materially over 5%, whereas markets aren't sure rates will exceed 5%.
Why is RPI no longer used? ›Overall, we do not view the RPI as a good measure of inflation. For the previous reasons, it is likely to overstate inflation. It is not possible to be precise about the extent of any upward bias as there is no single perfect measure to benchmark it against.
What is replacing RPI? ›As a result, the government has announced in November 2020 that the RPI will be replaced by Consumer Price Index (CPI) and Consumer Price Index with Housing costs (CPIH) – being phased out by 2030.
Is RPI the same as inflation? ›Understanding the Retail Price Index (RPI)
The Retail Price Index (RPI) is an older measurement of inflation that is still published because it is used to calculate cost of living and wage escalation; however, it is not considered an official inflation rate by the government.
Between 1949 and 2021 the inflation rate of the Retail Price Index fluctuated from a high of 26.9 percent in August 1975 and a low of minus 1.6 percent in June 2009.
What is so great about RPI? ›RPI is a terrific school that really challenges the students! The professors are always there to help with their classes, and ways to better your future on your career path. The students are also very helpful, and sticking around the campus really enhances your knowledge of the student culture.
Is RPI in financial trouble? ›...
1. RESEARCH EXPENDITURES AND REVENUES.
| YEAR | Research Revenue/Total Revenue |
|---|---|
| 2019 | 18.1 |
| 2020 | 22.8 |
This is because it includes items such as private and social rents, along with mortgage interest payments. This is one reason why RPI tends to overstate inflation when compared to other measures such as CPI (see below). This is particularly true when house prices and interest rates increase rapidly.
What is the difference between CPI and retail inflation? ›CPI measures the weighted average prices of the basket of goods and services consumed by households. RPI is a measure of consumer inflation that considers the changes in the retail prices of a basket of goods and services.
What is RPI currently 2022? ›CPI inflation was 5.5% in January 2022 (Index: 114.9), up from 5.4% in the year to December 2021. RPI inflation was 7.8% in January 2022 (Index: 317.7), up from 7.5% in the year to December 2021.
What is the projected CPI for 2024? ›
For 2024, that estimate ranges from 1.1 percent to 3.6 percent. Inflation as measured by the core PCE price index, which removes food and energy prices and is less volatile, is likely to be above the estimates for the PCE price index in both years.
What will the Consumer Price Index be in 2026? ›The dollar had an average inflation rate of 3.66% per year between 2021 and 2026, producing a cumulative price increase of 19.69%. The buying power of $10,000 in 2021 is predicted to be equivalent to $11,968.77 in 2026. This calculation is based on future inflation assumption of 3.00% per year.
What is the future of the CPI index? ›In the long-term, the United States Consumer Price Index (CPI) is projected to trend around 303.99 points in 2023 and 309.76 points in 2024, according to our econometric models.
What are economists predicting for 2023? ›Global GDP growth in 2023 is forecast to climb 1.6%. Developed Market growth is forecast at 0.8%, U.S. growth is forecast at 1%, Euro Area growth is projected to come in at 0.2%, China's economy is forecast to grow 4.0% and Emerging Market growth is forecast at 2.9% in 2023.
What is the predicted inflation rate for 2023 and 2024? ›The latest Survey of Professional Forecasters projects a rapid slowdown of inflation from 5.9 percent in 2022 (Q4/Q4) to 2.9 percent in 2023, followed by a modest decline in 2024 to 2.3 percent. The 2024 projection is reasonably close to the Federal Reserve's inflation target of 2 percent.
Will the prime rate increase in 2023? ›Markets expect the U.S. Federal Reserve (Fed) to raise rates again on February 1, 2023, probably by 0.25 percentage points to 4.5%-4.75%. However, there's a reasonable chance the Fed opts for a larger 0.5 percentage point hike.
How much is cost-of-living raise for 2023? ›Social Security benefits and Supplemental Security Income (SSI) payments will increase by 8.7% in 2023. This is the annual cost-of-living adjustment (COLA) required by law.
What was the Consumer Price Index in January 2022? ›CPI inflation was 5.5% in January 2022 (Index: 114.9), up from 5.4% in the year to December 2021.
When was the highest inflation in U.S. history? ›The two highest year-over-year rates of inflation in U.S. history were in 1778 and 1917.
What is the U.S. inflation year by year? ›U.S. inflation rate for 2021 was 4.70%, a 3.46% increase from 2020. U.S. inflation rate for 2020 was 1.23%, a 0.58% decline from 2019. U.S. inflation rate for 2019 was 1.81%, a 0.63% decline from 2018. U.S. inflation rate for 2018 was 2.44%, a 0.31% increase from 2017.
What is the difference between CPI and RPI? ›
The CPI mostly uses a geometric mean to aggregate price changes, whereas in the RPI an arithmetic mean is used. The former is better-suited to accounting for the effect of substitution between goods and services when relative prices change.
Will there be a financial crisis in 2023? ›The labor market is cooling down, putting less pressure on wages, while housing prices and new construction have both declined. Unfortunately, this slowdown in economic activity will likely come with a cost: According to Bloomberg's December 2022 survey of economists, there is a 70% chance of a recession in 2023.
What will cause 2023 recession? ›“It is likely that the world economy will face recession next year as a result of the rises in interest rates in response to higher inflation,” Kay Daniel Neufeld, director and head of forecasting at the Center for Economics and Business Research, said this week.
Will us go into recession in 2023? ›The threat of a U.S. recession remains alive in 2023. The consensus estimate on the probability of a meaningful downturn in the American economy in the next 12 months is at 65%, according to Goldman Sachs Research. But our own economic analysis rates that probability much lower, at 35%.