The growth of used car prices hit an all-time high last month as prices rose 17.2 per cent year-on-year.

It’s a record month-to-month increase – with prices being up 14.1 per cent in July – which is also more thah double the rate of growth recorded in May, which was up 8.1 per cent.

Over the past few months these price increases have been steadily growing, and are driven by the huge demand for used cars.

This is a result of supply issues in the new car market as manufacturers have faced problems building cars due to a semiconductor chip shortage, as well as delayed demand from the pandemic lockdown periods.

Data from the online car marketplace Auto Trader, which analyses around 900,000 adverts on its site to pick up trends.

Across its platforms in August it saw 70.2 million visits, a large rise of 36.4 per cent on pre-pandemic figures.

A pleasing level of growth

Richard Walker, Auto Trader’s director of data and insight, spoke to the PA News Agency on the results.

He said: “To put the price movement into context, in August 2020 average prices were increasing at a rate of six per cent year-on-year, which at the time marked a new record.

“Whilst few could have imagined a year later, growth would be accelerating at nearly three times that rate, we’ve said throughout the pandemic that we anticipated sustained levels of growth fuelled by the strong consumer demand in the market, even when other commentators predicted a collapse in prices.”

In its latest consumer sentiment survey of 2,200 car buyers, it found 26 per cent believe car ownership is more important than before Covid, while half said they felt more confident they could afford their next car than a year ago.

The Jaguar XK saw the biggest price growth in August, going up 48.3 per cent to an average of £26,447. This was followed by the Jeep Grand Cherokee, up 34.2 per cent to £20,704 and the Mazda MX-5, up 33.9 per cent to £13,091.