Used automobile retail costs secure, as market sees file begin to 2025

Used automobiles are promoting at a file tempo and costs are persevering with to stabilise thus far in 2025, in keeping with the most recent information from Auto Dealer.

Primarily based on over 800,000 day by day observations throughout the entire retail market, Auto Dealer’s Retail Value Index reveals the common retail worth of a used automobile (£16,774)  was flat in January on a month-on-month (MoM) and like-for-like foundation; a distinction to the 1.9% decline recorded in January 2024.

And with commerce values just lately trending above retail, it’s seemingly costs will strengthen additional over the approaching months because the market adjusts accordingly.

Stability in retail costs is the results of the continuing post-Covid squeeze in used automobile provide (down 3.1% year-on-year in January) coupled with buoyant ranges of shopper demand, as mirrored within the circa 87.1 million cross-platform visits to Auto Dealer final month.

That viewers stage not solely marks a 24.8% enhance on December (69.7 million), however the highest variety of visits in a January ever recorded.

It additionally follows the degrees of engagement seen all through 2024, which totalled circa 978 million visits, an increase of seven% YoY.

Prime 10 used automobile worth development (all gas varieties) | January 2025 vs January 2024 like-for-like  

Used automobiles promoting at file tempo

The mixture of sturdy demand, and in lots of instances, the pointless under-pricing of inventory, is leading to used automobiles promoting at a file tempo.

In truth, it took a mean of simply 38 days for a used automobile to promote in January, which is three days sooner than in January 2024 (41 days). It’s additionally the quickest begin to the yr since Auto Dealer’s data started in 2019.

With such wholesome ranges of shopper urge for food out there, the speedy turnaround of inventory can be on the potential expense of margin alternative.

Certainly, Auto Dealer’s information reveals that circa 61,000 excessive demand used automobiles are presently being priced beneath their true market worth, leading to over £24 million in potential margin being missed – the equal of round £3,000 per retailer.   

Automobile shopping for confidence stays regardless of financial considerations  

In accordance with Auto Dealer’s retail information, demand is translating into gross sales, albeit after a gradual restart following the tip of the festive interval that mixed with a mixture of floods and snow disruptions.

Gross sales efficiency rapidly improved over the course of the month although with the ultimate weeks of January recording a powerful enhance over the identical interval final yr.

In consequence, general gross sales in January have been a comparatively flat, down by 1% YoY.

This strong efficiency contrasts with latest uncertainty surrounding the financial system, as mirrored within the steeper than anticipated fall in official shopper confidence ranges in January.

Though there are potential dangers round inflation and unemployment this yr because the Chancellor’s Price range is applied from April – in addition to rising tariff rhetoric from President Trump – there’s trigger for optimism for the months forward, with shopper spending and actual incomes forecasted to rise in 2025.

However importantly, regardless of the more difficult wider financial background, demand and automobile shopping for confidence stay largely unaffected, with Auto Dealer’s information revealing secure ranges of shoppers’ confidence in affording their subsequent automobile buy.

Certainly, in a research of three,700 market automobile consumers looking on Auto Dealer (performed in December), 57% agreed they have been ‘rather more assured’ or ‘a bit extra assured’ of their potential to pay for his or her subsequent automobile (35% mentioned ‘about the identical’). That is up from 47% 12 months earlier.

What’s extra, virtually three quarters of shoppers are nonetheless seeking to buy a automobile within the subsequent six months, which is in keeping with the identical time final yr.

As such, Auto Dealer’s 2025 outlook stays constructive, predicting the used automobile market to keep up the robust development momentum of the final two years and rise from circa 7.61m gross sales in 2024 to round 7.70m in 2025.

Richard Walker, Auto Dealer’s information & insights director, mentioned: “Following a really robust 2024, the used automobile market continues to indicate its large resilience within the face of broader financial turbulence.

“The yr forward will maintain some distinctive challenges for the trade, however our information ought to provide some optimism for 2025 – demand is powerful, costs are secure, and automobiles are leaving forecourts at a file tempo.

“And regardless of some unfavorable rhetoric, primarily based on the strong market fundamentals we’re monitoring, we don’t see any important or rapid risk to shopper urge for food for used automobiles.”

Walker mentioned it’s disappointing although for retailer profitability efficiency to see potential margin nonetheless being missed with too many automobiles, together with a number of the most fascinating inventory, being under-priced.

He added: “With so many consumers returning to their subsequent automobile analysis following the festive interval, there is a massive alternative for retailers over the approaching months.

“In addition to guaranteeing your inventory is the place shoppers can discover it, I hope our insights will give retailers the arrogance to cost to the market and safe the margins which are out there.”

Prime 10 used automobile worth contraction (all gas varieties) | January 2025 vs January 2024 like for like