Cap HPI expects ‘volatile’ used market despite high demand this summer

Used car values have remained strong in August due to consistent sales performance across all channels, according to Cap HPI.

Prices for three-year old cars with 60,000 miles fell by just 0.7%, an improvement on the 1.6% reduction experienced in July.

The figure mirrors September 2015, which saw an overall decline of 0.6%. But tactical registration activity in September could impact values.   

Cap HPI reported that auction activity has remained strong and despite the holiday season, the halls have experienced good attendance levels and the balance of this alongside an easing in stock levels led to conversion rates holding well through August.

It also found City Car performance to be unusually strong, with a reduction of only 0.7%. When compared with the average reductions of 2.1% over the previous four months - it found some traction moving into September.  

James Dower, senior editor of Cap HPI Black Book, said: “The unusual strength of City Car may temper over the coming months. It’s a sector that is usually significantly impacted by tactical registrations alongside aggressive new car marketing campaigns.

“There are likely to be two pressure points moving forwards, the nearly new market and also potentially higher volumes of stock entering the used car arena. 

“The majority of manufacturers still have significant volume aspirations for the remainder of the year and the new car retail performance in September will dictate just how far reaching the effect of pre-registration activity will be over the used car market in the final months of the year.”  

SUV remained stable with an average downward movement of 0.4% into September with significant strength from the larger derivatives where low stock volumes drive a premium sale price.  The medium size SUV’s are not quite showing the same level of strength.

The Upper Medium Sector performed in line with the overall average movement. Diesel derivatives moved down by 1%, in contrast to petrol examples that averaged a 0.2% reduction, as higher volumes of diesel vehicles found their way into the market.