10:15 am, September 27, 2022
For the first time this year prices of used cars have risen.
September saw trade values jump by 0.3 per cent, reversing nearly a year of declines.
Speaking exclusively to Car Dealer, Cap HPI’s director of valuations Derren Martin declared the uplift as ‘surprising’.
‘That’s as strong as it has been,’ he said. ‘For the last few months we’ve see a plateauing of the market – it’s been very flat.
‘While we have got an upward movement, it’s only 0.3 per cent which is less than £50 – but it’s still an upward movement [which shows] the trade market has been particularly strong and upbeat.’
September’s rise was the first since October 2021.
Back then prices rose by 1.2 per cent off the back of a 5.6 per cent increase in September 2021.
From November 2021 to August this year values have inched downwards.
But with prices up by nearly 30 per cent throughout 2021, it has lead Cap HPI to describe the market as ‘plateaued’ for most of 2022.
Martin said: ‘You have to go back to 2016 to see the last downward movement in a September, but what is unusual [this year] is the flat period we’ve had before [this September’s rise].’
The retail market in September was ‘steady, slightly down’, said Martin, adding: ‘It’s not to the levels dealers would like it to be.
‘But the trade market has surprised us by being so robust and upbeat.’
In answer to whether September’s rise is something for dealers to really pay attention to, Martin said: ‘I think dealers need to still be wary – the market is going up.
‘There’s low supply in the market as we haven’t really seen an influx of vehicles from September yet.
‘What’s driving that upward movement are dealers that are buying but not overstocking.
‘I certainly think we’ll see less of a dynamic this year of dealers stocking up for what can be a really buoyant January. This time last year dealers were buying for that and probably were prepared to hang on to stock this year.
There’s a lot more sort of reticence and weariness to do that now.’
Martin also explained that demand for petrols, diesels and in particular hybrids such as the Kia Niro and Toyota C-HR was very strong in September, while prices for EVs such as the Tesla Model 3 fell due to better supply.
For the rest of the year, Martin had some advice for dealers.
‘They all know what they’re doing – they’re not overstocking and reducing their advertised prices in bulk,’ he said.
‘I would say dealers need to be wary as values will drop at some point this year – it might not be October but it will come and it won’t be a crash.’
