(Bloomberg) -- British drivers are buying enough used hybrid cars that government statisticians are thinking of including their prices in the official basket of goods that go into data on inflation.
Used hybrid car sales have surged 59% from 2022 to 2023, the Office for National Statistics said Tuesday citing figures from Auto Trader. The jump indicates that what was once a niche purchase — cars that have both electric motors and a traditional gasoline or diesel engine — has become a mainstream item for UK consumers.
The ONS started using second-hand car sales data from Auto Trader in March 2024 for its calculations as part of efforts to improve consumer price inflation statistics. The new figures mean the ONS can access 300,000 used car price points a month, three times more than before.
New electric and hybrid car prices have since 2021 been included in the Consumer Prices Index, the inflation benchmark tracked by the Bank of England and Treasury. But since until recently most hybrid sales were new cars, prices for used ones have been outside the basket. That could change as soon as next year, when the ONS does its annual re-weighting of the goods and services making up its CPI data.
“These new data allow us to monitor trends and update our representative basket when spending hits the necessary threshold,” the ONS said. “The ‘shopping basket’ of items used to measure consumer price inflation changes each year to reflect consumer spending patterns.”
Second-hand hybrid cars made up 13% of used vehicle sales in June, a 44% increase from last year. Meanwhile, diesel and petrol used car sales stayed flat or posted mild declines over the same period.
Used cars two- to four-years old, regardless of fuel type, were the most popular in 2023, Auto Trader figures cited by the ONS showed. UK drivers favored German second-hand cars, buying up over 1 million of them last year, almost double the number of domestically-produced vehicles sold.
When it comes to selling used cars, color matters. Black, grey and white cars were the most popular for buyers. Pink and turquoise were among the least sought-after, Auto Trader data showed. Among metal colors, silver and bronze used-car sales topped gold vehicle purchases.
In addition to used cars, the ONS also started collecting more granular train fare data. Next on the agenda are grocery prices.
Starting March 2025, the ONS will have access to 300 million price points from sales of over a billion units of products per month, collected directly from supermarket scanners. That’s compared to the current 25,000 prices per month collected by its staff going into shops.
“We will introduce our biggest update so far for 50% of the grocery market,” said Mike Hardie, deputy director of the prices transformation division at the ONS. “The use of these new data sources is a big step forward for the ONS and will allow a significant improvement in the quality of our consumer price statistics.”
--With assistance from Tom Rees.
©2024 Bloomberg L.P.
