Used car values return to seasonal norms, says Cap HPI

Automotive data expert Cap HPI is reporting that used car values fell by 1% in August, the smallest fall since March.

It was still the biggest drop in that month since 2011, but points to a market that is stabilising after a tumultuous few months.

In May, used car values experienced the heaviest monthly drop since December 2014 and the steepest fall in the month of May since live data was introduced in 2012.

Derren Martin, head of UK valuations at Cap HPI, said: "Except for January, each month this year has seen a drop in excess of the same month in the previous three-years.

“The used car market pricing realignment has been ongoing since the end of 2018 and accelerated from Easter onwards.

“Our Live values data points to a more stable period ahead as demand and values are more closely aligned."

Supermini values showed the greatest strength with a fall of just 0.2% at three-years, 60,000 miles, equating to an average of less than £10. The market has seen an increasing demand for smaller petrol cars.

Upper medium cars reduced by more than any mainstream sector with a 1.6% average drop equating to £160 in monetary terms. While SUVs dropped in value by an average of 1.0% or £120.

Average diesel car values dropped by more than their petrol counterparts, 1.1% compared to 0.8%, which is an ongoing trend through 2019.

Martin said: "Diesel values are not dropping off a cliff, but they are under more pressure than they were last year and more than petrol cars.

“The values of electric vehicles remain a mixed bag. Values for both the Hyundai Kona Electric and Kia E-Niro have risen to reflect the limited available volumes in the used market and extended lead times when ordering from new. 

“Of the volume models, the older Nissan Leaf continues to be under pressure in the wholesale market, as the choice remains plentiful, plus the newer model is more popular due to the additional battery capacity."

Looking ahead, Cap HPI do not currently see any significant challenges to the used car market as a direct result of Brexit.