WionDrive News Desk 
The latest data from Auto Trader reveals a resilient performance in the used car market in London during May, characterised by strong consumer demand, rapid sales, and increased transactions. Average retail prices have returned to seasonal norms, declining by 0.7% on a month-on-month (MoM) and like-for-like basis, reflecting the market’s robust health. This trend of price softening in May, following an April uptick, has been consistent since 2011, except for the pandemic-affected years of 2020 and 2021.
Auto Trader recorded nearly 83 million visits to its platform in May, indicating an 11% increase compared to the same period last year and a nearly 20% rise since May 2022. This surge in engagement is driven by escalating consumer demand, which rose by 8.6% year-on-year (YoY) in May, according to Auto Trader’s data.
The speed at which used cars are selling underscores the current demand. In May, it took an average of just 29 days for a used car to sell, slightly slower than in April but one day faster than the same period last year. Notably, certain segments witnessed even faster sales; volume brands took an average of 27 days to sell, while 3-5-year-old cars left retailers’ forecourts in just 26 days.
Despite a slight slowdown compared to April, Auto Trader’s retail sales data indicates a significant 6% increase in used car transactions last month, fueled by robust demand in the market.
Supply dynamics are undergoing a shift as well. After eight months of growth, the volume of used car stock fell by 1.1% in April, followed by a larger drop of 2.2% in May, the most significant decline since last June. While supply in some segments remains strong, particularly at the extremes of the market, the middle segment is experiencing a squeeze. Supply for cars less than a year old rose by 39% YoY, and nearly 12% for those aged over 10 years old. However, the market is still feeling the effects of the approximately 3 million ‘missed’ sales during the pandemic, with supply of 1-5-year-old stock falling by 17.3% YoY.
This tightening supply, coupled with rising consumer demand, has created favorable market dynamics, contributing to the return of retail prices to seasonal norms. Auto Trader’s Market Health metric, which assesses potential market profitability, rose to 11% in May, the highest rate of growth since July 2023. Despite these positive conditions, many retailers are pricing high-demand stock below market value, eroding their margins and potentially costing around £35 million collectively, or approximately £4,000 per retailer.
