Used car prices are continuing to rise with Auto Trader figures showing a 6.1 percent increase in the average retail price of a secondhand car during August.
This is the largest monthly price increase ever recorded, and the fifth consecutive month of growth in 2020.
It means the average asking price of a secondhand car in the UK now stands at £13,705.
Analysts add that during August, there were fewer diesel cars, automatic cars and vehicles aged under one year in the marketplace.
This actually helped slow down the rate of price growth – without these challenges, it would have been higher still.
“Over the last five months, we’ve observed a very positive trajectory for used car prices, driven largely by supply challenges and extremely strong consumer-led demand,” said Auto Trader insight director Richard Walker.
Mr Walker said that although some of the supply challenges are beginning to ease, strong consumer demand means that “whilst the trajectory may begin to level off slightly, we’re confident prices will remain buoyant over the coming months.”
Demand higher than UK population
Demand on Auto Trader was up a hefty 30.5 percent last month, with 67.1 million visits – more than the total population of the UK.
Petrol cars are proving particularly popular, with a 27.4 percent increase in demand, while diesel car demand rose 19.3 percent.
Surprisingly, demand for electric cars has actually fallen below supply, which saw prices actually decline 5.2 percent last month.
This is the biggest monthly fall in electric car prices in almost five years.
The average used electric car now cost £25,880, compared to £12,389 for a petrol car.
This “suggests car buyer are reverting to the type of vehicles they are familiar with, and what they consider to be the most affordable choice”.
Sue Robinson, director of car dealer trade body the NFDA, said robust demand was likely to continue for a number of factors “including the movement away from public transport to owned vehicles, and the increase in disposable income for a number of consumers”.