The UK’s used car retail market held its ground through March, successfully absorbing a 10% increase in stock volumes while maintaining an upward trend in pricing.
Despite the backdrop of volatile fuel costs and broader economic uncertainty, the latest data from Cazana shows that retailers have successfully defended their margins, with advertised prices across most age brackets continuing to climb.
The pivotal three-year-old sector saw values rise by 1%, adding an average of £200 to retail tags, a move mirrored by younger, one-year-old stock, which saw a similar £260 increase.
While mid-aged vehicles remained steady, the ten-year-old budget segment experienced a slight cooling, with prices softening by 1% (about £75), suggesting a market that remains fundamentally healthy at the core, even as the most price-sensitive consumers begin to exercise caution.
Premium marques continue to dictate the pace of the market. BMW and Mini stood out as the top performers in March, seeing average price increases of 3% and 2.8%, respectively. This performance marks the third month in a row that BMW has featured in the top three for price growth. Mercedes-Benz followed closely with a 1.8% rise.
At the other end of the scale, Land Rover and Audi saw marginal decreases, though these were minimal. A particularly striking trend emerged regarding fuel types.
Despite petrol and diesel prices approaching £2 per litre and £1.60 per litre respectively, in some areas, traditional internal combustion engines continued to see value growth.
Overall, main dealers and car supermarkets were the most active in nudging prices upward, while independent retailers kept their valuations largely level.
Hybrids led the sector with a 2% price hike, followed by a 1% rise in petrol and diesel car prices. Interestingly, electric vehicle (EV) values remained flat. While a spike in pump prices typically triggers an immediate surge in EV interest, the current Cazana data suggests a potential lag in consumer response or the belief that global supply pressures may ease following the ceasefire in the Middle East.
In terms of body styles, the market continues to reward scarcity. Estates and saloons saw the largest gains, with prices rising by an average of 3%, while hatchbacks grew by 1.6%. SUVs, which now represent the vast majority of used stock, saw a more measured 1% increase.
The ongoing strength of estates and hatchbacks highlights a clear trend: as the new car market becomes increasingly dominated by SUVs, buyers seeking traditional silhouettes are finding fewer options, allowing dealers to command a premium for these models.
Commenting on the Cazana data, automotive expert Derren Martin said: “The used car retail market has remained strong, despite the outside pressures on fuel prices and general cost of living concerns from the war in the Middle East. Even with volumes increasing, dealers seem keen to maintain prices and margins.
“It is perhaps surprising to see petrol and diesel values increasing, and EVs only staying level. This could change over the coming months as more consumers consider switching to an electric car, with an eye on charging costs compared to filling up at a petrol station.
“As in previous months, estates and hatchbacks remain sweet spots for dealers, as volumes of SUVs continue to dominate. With volumes of part-exchanges increasing from March plate change activity, it will be interesting to see whether retailers can continue to edge prices up, or whether the distractions of Bank Holidays in April and May will lead potential customers away from car buying activities.”