The used car market is experiencing a ‘black swan’ moment as values continue to rise in July, setting new records.
July is already up by around two per cent and should top out at around three per cent by the month’s end, says Cap HPI.
It means that as dealers go into August, the market will have experienced four months of price rises – up by a total of more than 13 per cent.
April saw values increase by two per cent, May was up by an unheard-of 6.7 per cent, while last month values rose by 4.8 per cent
‘We’re seeing unbelievable price movements at the moment,’ Cap HPI’s head of valuations, Derren Martin, told Car Dealer Live.
In our video, which you can watch at the top of this story, Martin said the current strong market was unprecedented.
‘Values are up about two per cent already so far in July – it’s a lot slower than it has been, but our values are still increasing,’ he said.
‘We’re going to have four months on the trot where values have increased by more than we’ve ever seen before. These sorts of phenomena don’t happen. It’s a really unusual, black swan event.’
For context, the June market is normally hit by seasonality changes and was down by 2.1 per cent in June 2019.
Cumulative black book live percentage movements, meanwhile, show a 13.5 per cent rise in June 2021. In the same month in 2019, the percentage movement was down 6.7 per cent.
‘Seasonality is out the window,’ said Martin. ‘This year started off a little bit weaker than previous years, but it’s just increased dramatically since April.
‘We’re now at 13.5 per cent, and if you think even if we then started to decline in a normal way, there’s no way it’s going to be anywhere near any of those previous years. It’s just so unusual.’
Looking at the past three months, prices for some cars are ‘going through the roof’.
Martin revealed Mini Cooper S (2018-present) prices at three years/30,000 miles have gone up by over 32 per cent or a whopping £4,000 – the highest riser in the past three months.
There’s no one type of car that’s seeing price increases either, as they’re across the board.
For instance, prices for the current model Mercedes C-Class Cabriolet at three years/30,000 miles are up by 31.6 per cent or £5,850, and the 2012-2018 Vauxhall Zafira is up by 24 per cent or £2,052.
‘There are concerns over the next few months with shortages of stock, so prices have just gone through the roof in the trading market,’ said Martin.
‘The retail market hasn’t followed it quite to the same degree, but it’s now catching up. Some of the cars [seeing price rises] are not the ones you would expect to see.’
Martin admitted that the rise won’t ‘carry on forever’ but ‘values are going to stay strong for a while’.
Click the video at the top of this story to watch the full interview