Used car values decline with electric vehicles suffering largest fall

April saw average used car values at the three-year, 60,000-mile point, fall by 1.5%, equivalent to around £300, according to the latest analysis by Cap HPI.

The fall follows an overall rise in values of 0.5% over the first quarter of the year and reflects a gentle softening in demand and an increase in supply.

The average monthly movement over the past 12 years, since Cap Live was introduced, was a 1.2% drop.

Data analysis shows the trade and retail markets in the run-up to Easter were healthy, with a slight dip after the Bank Holiday weekend. The dip was in line with what typically happens at this time of year, said Cap HPI.

Derren Martin, director of valuations at Cap HPI, said: “The market feels healthy,  but a number of retailers have expressed that demand is slightly below where they had hoped and budgeted for, after a robust first quarter.

“Petrol-engine vehicles have continued to be the flavour of the month, with dealers comfortable that they will sell these quicker than other fuel types. Interestingly, BEVs (battery electric vehicles) and diesel-engine cars have been the slowest to sell, making dealers wary about overstocking.”

Values at the one-year age point declined by 1.3%, and at five years old, values reduced by 2% and 3% at the 10-year point.

With the exception of seasonally attractive convertibles and coupe cabriolets, all sectors experienced an average drop in values in April’s Cap Live at the three-year age point.

Upper medium, or D-Sector, cars dropped by the most, with BEV and diesel models most heavily affected. Volumes continue to reduce in this sector, with the overall share of the used market for these cars halving over the last 10 years.

BEVs saw the largest average decline, dropping by 3.7%, around £780 on average, compared to petrol at 1% or £200 and diesel at 1.9% or £380.

It is the largest BEV value drop since June of last year. Models that have seen notable drops in value include the Toyota BZ4X (12.5%/£2,800), Nissan Leaf (8.5%/£800), Polestar 2 (7%/£1,300), Ford Mustang Mach-E (5.5%/£1,225) and Volkswagen ID.3 (5%/£650).

However, the Honda e, Lexus UX, and Seat MII all remained level, while the Mini Cooper (1%/£100) and Cupra Born (2.1%/£300) experienced an increase in value.

Martin concluded: “It would not be a surprise to see values continuing to gently dip in Cap Live in May, in what is traditionally one of the more difficult months of the year, with supply still high from March and April new car activity, plus Bank Holidays to contend with.

“The average May movement in values since 2012, excluding 2020 and 2021 due to the highly unusual used market in those years, was -1.6%. So, if we are returning to seasonal norms, somewhere close to this average would not be a shock.

“Battery Electric models will likely continue to see mixed-value moves. There have been some incredibly large drops this month, which may help stimulate demand, but there could also be some large movements to come for some cars as they continue to find their place in the market.”