Used market shows greater resilience in Q4

The average value of a used vehicle at three years and 60,000 miles decreased by 4.2% in Q4 2024, demonstrating a more resilient market than in 2023.

Values were down by 10.5% during the same period in 2023, according to data from Cap HPI.

Among vehicles at this age and mileage, in Q4 2024 approximately 60% experienced a reduction in value, 35% remained stable, and 5% saw an increase. 

Cap HPI said the retail and wholesale sectors were characterised by “typical seasonal patterns” in December.

Chris Plumb, head of current car valuation at Cap HPI, explained: “In line with the retail market, December’s wholesale activity has entered the typical seasonal slowdown, with conversion rates and performance against cap values gradually declining throughout the month. This trend closely mirrors previous Decembers.

“While some trade buyers remain active, they are highly selective, focusing only on the best fresh stock offered by vendors.

“Key factors influencing purchasing decisions include vehicles with clean mechanical and cosmetic condition reports, good specifications, provenance, desirable colours, low mileage, and competitive pricing.

“Vehicles requiring mechanical repairs or significant cosmetic improvements continue to pose challenges for vendors. Such stock often requires multiple attempts to sell and typically achieves lower returns compared to cap clean values.

“This trend has been consistent throughout the year, emphasising the importance of accurate vehicle assessments to ensure quick and efficient stock turnover.”

Fuel types showed comparable performances at the three-year point, with petrol vehicles recording the largest decline for the second consecutive month with a 1.8% (£270) decline. 

Plug-in hybrids (PHEVs) followed at -1.6% (£350), followed by electric vehicles (EVs) at -1.4% (£280). Hybrids and diesel vehicles performed best, both registering declines of 1.2% (£210).

The wholesale EV market continues to evolve, with “encouraging trends” witnessed by Cap HPI throughout 2024.

While retail days to sale have increased, auction sales attempts for EVs are now comparable to those for other fuel types.  

This year is set to break records for used EV sold volumes, marking a 90% increase over 2023 and surpassing the combined totals we received from 2019 to 2023.

Reflecting the seasonal slowdown in consumer demand, a slight increase in average days to sell has been observed in the Cap HPI retail advert database.

In November, the average days to sell was 41, rising only slightly to 43 days in December. It indicates that while the market adjusts seasonally, it remains relatively stable.

Plumb concluded: “The outlook for January, and beyond, is optimistic and largely positive. Low supply will continue to play a key role in maintaining healthy competition and demand for used car stock, while projected consumer demand remains encouraging.

"2024 has been a successful year for both vendors and retailers. Reduced used car stock volumes returning to the market and healthy retail consumer demand have underpinned market stability.

“At this stage, there is no reason to believe that the first quarter of 2025 will differ significantly in terms of demand and overall stability.”