Seasonal trends cause 1.6% drop in used car market

Seasonal pressures pushed the used car market to a 1.6% decline in July reports Cap HPI.

Black Book Live reported a drop of 1.6% at three years 60,000 miles, which is a larger decline than the 1% reported in June. 

James Dower, senior editor at Cap HPI Black Book, said: “The monthly figures for July 2015 saw a decline of 1.2%, whilst the deterioration is marginally greater year-on-year, it does show that the market to date was not significantly affected by the political landscape and is also within the seasonal historic average of -1.7% at three years 60,000 miles.

“The used car market behaved much as would be expected at this time of the year and we did not experience any unusual patterns develop through the month.  The cause of the modestly heavier drop in values through July can be attributed to greater trade stock availability allowing buyers to be more selective.”

The largest declines were seen in the electric vehicles sector with a drop of 2.6% in July at three years and 60,000 miles.

Analysis by Cap HPI to examine buyer behaviour by sector showed SUV now accounts for 13.8% of all used car trade sales data received in contrast to only 5.6% in 2008.

Other sectors that have seen growth are city car and supermini although their growth is around 3%. These increases have been to the detriment of some other sectors which have seen notable declines in the proportion of sold data.

Dower said: “The data and industry feedback reinforces the view that the used market continues to operate normally despite outside influences. We are approaching the summer holiday season which will have the usual impact on footfall and retail demand. With one eye on the September plate change, it will be important to see how the new car market sets itself up through August.”

The company reports levels of 16 plate stock in the used retail market are high and are likely to remain so for the rest of the year. Black Book Live will continue to monitor and report the market on a daily basis ensuring accurate valuations throughout the month.