9:51 am, April 23, 2024
Used car values are dropping after dealers enjoyed a fruitful Easter period.
That is according to Cap HPI’s Derren Martin, who has put sliding prices down to a rise in volume as opposed to falling demand.
Martin, director of valuations at Cap HPI, made the comment on the latest episode of the Car Dealer Podcast, sponsored by JATO.
Appearing alongside regular hosts Jon Reay and James Batchelor, he said that despite the recent dip, 2024 has been a good year overall for retailers.
However, he admitted that there remains a ‘volatility’ the used EV market – a situation which won’t be helped by today’s news that Tesla is slashing prices around the world once again.
Speaking on the Podcast, recorded last Friday, Martin said: ‘The Easter period was relatively strong for dealers. I think it might have dipped off a little bit towards the last week or so from conversations that we’re having but we have plenty of data.
‘We actually saw more sold data over the Easter period than in the pre-Covid Easter period so that’s good. It’s been a good year so far actually for the used car market.
‘It was a strong first quarter. Values went up around half a percent over those three months with ebbs and flows within the averages.
‘Within our Cap Live product so far this month there has been a drop. We’ve seen conversion rates down and more volume coming back into the market.
‘I think the reason values are dropping is because of more volume rather than a drop off in demand. Obviously March – new plate day – generates more cars.
‘At the moment we are just under 1.5% down but that is fairly normal for this time of year. Once you get Easter out of the way you are getting into holidays and bank holidays in May and it’s probably one of the weaker periods of most years.
‘It feels as though we are getting into a more seasonal pattern again, like pre Covid, after we have obviously had some very unusual years.
‘It’s all pretty positive despite that drop. We’ll probably end up at about 1.5% down on average.’
When it came to EVs, Martin says that the state-of-play remains ‘mixed’ and called for more Government help to incentivise the used market.
Among the suggestions he put forward was a CUT in VAT when using public chargers.
He added:’The big fly in the ointment – as it has been for about 18 months to two years – will be electric vehicles. We are still seeing a lot of volatility in the electric vehicle market.
‘I think the biggest drop we have made this month has been 13% which is obviously pretty major.
‘We are seeing some weak values on certain EVs but others continue to hold relatively firm. It’s just really really mixed.
‘It’s very difficult to predict what happens there. We’ve got the ZEV Mandate which with new car pushes we see lots of heavy new car discounting.
‘Still it’s difficult to say why a used car buyer would buy an EV unless its now on price.
‘There is still some work for the Government to do in our opinion in regards to charging not at home as well.
‘It is a good market overall but there are definitely some issues in that EV world.’
The Car Dealer Podcast sees an industry guest join our hosts to discuss the motor trade’s biggest headlines of every week.
Among the topics up for discussion in the latest episode were the sale of Inchcape’s UK dealerships, the Alfa Romeo Milano saga and the future of the Northumberland Britishvolt gigafactory.
A full list of the stories discussed can be seen below:
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Inchcape agrees £346m deal to sell UK retail operations to US giant Group 1 Automotive
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What makes UK dealer groups so attractive to US investors? We ask industry experts for their take
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Alfa Romeo forced to rename upcoming ‘Milano’ after model accused of breaking Italian law
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Britishvolt gigafactory hopes set to end with Blyth site due to be sold to private equity firm
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GWM Ora to inspect condition of EV car batteries after crashes to cut waste
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Battery-electric vehicle sales poised to hit 414,000 mark in 2024, says Cap HPI
You can listen to all episodes of the Car Dealer Podcast on Spotify, or wherever you get your podcasts.
