Cap HPI: Used car values fall in January

January saw used car values drop 0.7% as dealers reported lower retail demand for vehicles priced over £12,000.

The drop was larger than the seasonal trend where, over the past five years, the movement in Black Book Live for January was an average of -0.4%.

Average downward movements were visible for each mainstream sector, with MPVs and SUVs the worst affected.

SUV values edged down by 1% on average, due to supply slightly outweighing demand. Within the trade sold data analysed by Cap HPI, the annual volume of data for SUVs has almost trebled in volume in six years.

Derren Martin, head of UK valuations at Cap HPI, said: “In 2013, SUVs accounted for 10% of the sold volume and by 2018 it was over 20%. Overall trade volumes received have increased but more so for SUV, with close to 400,000 records scrutinised last year for this sector alone.

“While SUVs usually sell well, certain examples of SUVs struggled to achieve previous cap values in January, so moved down by more than the norm, examples were Audi Q3, BMW X3 and Range Rover Evoque.”

The good news story for electric cars continued into the New Year, according to Cap HPI. Values for mainstream vehicles like the older iteration of the Nissan Leaf, the BMW i3 and the Renault Zoe offer great value for money and are packed full of technology for someone looking to be an EV adopter, it said.

Overall electric vehicles values rose 1.2% at the three year, 60,000-mile mark.

Martin concluded: “There is undoubtedly some uncertainty around the economy at the current time, with still no real clue as to how the run-up to the Brexit deadline in March will pan out or what the picture will be like afterwards.

“With so much uncertainty over the structure of any deal, it is impossible to predict what might happen to the used vehicle market.

“On the one hand, an economic downturn could lead to a difficult used car market, but if new car supply were to be affected by exchange rates, leading to price increases, this could push more consumers into the used car arena. Only time will tell.”

The data company advises that it is vital for the motor trade to keep an eye on real-time used values over the coming months as supply levels, in conjunction with the economic state of the nation, will undoubtedly lead to nuances within the market that will be reflected in these value movements.