The automotive industry is coping well with Lockdown 3 despite used car values dropping for the fifth consecutive month.
That’s according to Cap HPI, which said today (Mar 1) that its Live values fell by 1.5 per cent at the three-year point during February, equating to an average of £150 per car.
Since October, used car trade values have dropped by 9.4 per cent – or almost £950.
However, Cap HPI head of valuations Derren Martin said: ‘It would be easy to look at this headline figure and suggest that the used car market is struggling, but that is definitely not the case.
‘The average drops of almost 10 per cent were preceded by a period of six months where average prices increased. We believed a realignment was always likely.
‘Add to that the fact that for the past two months, and in November, the country has been in lockdown, with physical car showrooms closed, and it is unsurprising that there has been some pressure on prices due to a forced drop-off in demand.’
February continued the Lockdown 3 theme of sales rates generally being between 50 and 75 per cent of this time last year, with the average being 65 per cent, said Cap HPI.
And it added that it was a positive reflection of the work done by the industry since the first lockdown to develop its digital footprint and encourage customers to buy online in such numbers.
Martin said that with April 12 as the target date for non-essential retail to physically reopen, there was more positivity in the air.
‘Our analysis shows that with average retail sales rates being at around 65 per cent of this time last year, the remaining 35 per cent of consumers will be looking to buy once showrooms reopen in April.
‘Add to this those members of the public that are naturally in the market at this point anyway and we are likely to see a period of strong demand. We expect to see this push prices up for a short period of time.’
But because of economic hardship and increased used car supply, a return to pressure on prices is likely the further into 2021 we go, said Cap HPI.
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