Record prices for new and used cars means protection is paramount
There continues to be record growth in both new and used car prices, even after last year’s huge price leap. Economic slowdown and inflation due to the pandemic and war in Ukraine, alongside reduced production in part due to a shortage of semiconductors, has meant an ongoing shortfall in stock and a bottleneck in new car supply, pushing up prices.
The tide has been slowly turning on the supply issues, however, as The Society of Motor Manufacturers and Traders (SMMT) reported a seventh straight month of growth for the UK’s new car market in February, with a year-on-year leap of 26.2% in registrations. This has seen a slowdown in the meteoric rise of used car prices, of course, but they are still setting record highs.
Record new and used car prices
The average retail value of a used car in February was £17,654, according to the Auto Trader Retail Price Index. That was a 1.3% increase on the same month in 2022, when used car prices were up a huge 32%. Since the start of the pandemic, the average used car has increased by £4,000.
When we look at new cars, Auto Trader’s data reveals a significant increase in new car recommended retail prices (RRP). In just five years, average RRPs have risen a massive 43%, from £27,305 in January 2018, to £39,038 in January 2023. In the last year alone, RRPs have shot up 9%.
Sue Robinson, Chief Executive of the National Franchised Dealers Association (NFDA), said: “Auto Trader’s data continues to promote the automotive retail sector with growing confidence. Used car values have reported 35 consecutive months of year-on-year growth, which is extremely positive for retailers that are continuing to capitalise on this.
“It’s fascinating to see the growth in new car recommended retail prices. Manufacturers are now reporting increased levels in stock production reaching forecourts, so it will be interesting to see whether this has any impact on prices over the coming months.”
The greater the cost of a car, the greater the need for protection
With the average cost of new and used cars at record highs, the need to protect that investment should be a high priority for your customers, presenting an opportunity for your business to boost revenue, satisfaction and retention rates.
Warranty, GAP insurance, Service Plan, Tyre and Alloy Insurance, Cosmetic Repair Insurance, MOT Test Cover, and Roadside Assistance can all save your customers money. However, choosing a high-quality provider, such as Car Care Plan, is paramount when it comes to meeting your customers’ expectations, ensuring your reputation is not only protected but bolstered.
For further information on all of Car Care Plan’s award-winning vehicle warranty and asset protection products visit carcareplan.com/products.