6:33 am, November 27, 2023
Used car prices have fallen another 4.2% for the second month in a row as the valuations correction continues apace.
In an exclusive video update with Car Dealer (above), Mark Bulmer from trade price experts Cap HPI revealed the latest drop for cars at the three year/60,000-mile mark.
He explained the November drop follows a 4.2% fall in October meaning used cars have now plummeted 8.4% in the last two months alone, equivalent to an average drop of £1,625.
This means used car prices in the trade have now fallen 17.6% since April.
Cap HPI says it is ‘important to point out’ that petrol and diesel used car values remain around 15% above where they were at the start of 2021.
Electric vehicles, however, have dropped 20% from the same point in 2021.
Bulmer, senior car valuations editor for Cap HPI, said: ‘It’s been a very testing month for everybody. There’s no change from what we were seeing four or five weeks ago – values are under pressure.
‘There are plenty of cars in the market and not enough people to buy them. So the balance between supply and demand is definitely in favour of the buyer.’
Cap HPI said in an editorial to dealers that it is not uncommon to see large drops in November with 3.1% recorded in 2014 and 3% in 2020.
Bulmer said that used car dealers are not stocking up and many dealer groups are on ‘buying bans’ until the market settles.
He said the falls were a culmination of a number of things including high interest rates, the cost of living and the seasonal effect of the forthcoming Christmas season.
Bulmer labelled the shift in used car prices as a ‘correction’ after years of high prices driven by supply issues caused by the pandemic.
Bulmer said he didn’t think the correction had ‘quite finished yet’ as a number of leasing companies, fleets and manufacturers continue to push used cars into the market at a time when few buyers are out there.
Electric vehicles fell 3.3%, or £750, in November, making them the best performing fuel type.
Biggest Used Car Price Falls
Source: Cap HPI November 2023 data
- Range Rover Evoque Hybrid: -11.6%, -£3,407
- Renault Captur: -11.6%, -£1,430
- Infiniti Q30 Diesel: -11.5%, -£1,528
- BMW 4 Series Convertible Diesel: -10.9%, -£2,100
- Peugeot 3008 Petrol Hybrid: -10.7%, -£2,188
- Renault Captur Diesel: -10.7%, -£1,392
- Mercedes-Benz EQA Electric: -10.6%, -£2,750
- Peugeot 2008 Diesel: -10.6%, -£1,544
- Cupra Formentor Hybrid: -10.6%, -£2,387
- Seat Ateca: -10.6%, -£1,758
Looking ahead to December and the new year, Bulmer said he thinks there are more falls to come.
He added: ‘Everybody thinks that prices go up in January. In effect, they actually don’t, they tend to stay pretty much where they are and even move back slightly.
‘In January there could still be some pressure on values, maybe not moving down significantly, but definitely not going up.’
Looking at December, Cap HPI said ‘Christmas had come early for dealers, but not in a good way’ referring to the lull in the market often seen in the run up to the holiday season.
The firm added: ‘Values are likely to continue to drop in the run up to Christmas, as although retailers’ appetite may increase slightly as they look to buy for an anticipated increase in consumer demand, this is unlikely to be in large quantities.
‘Since Cap Live was introduced in 2012, December has experienced an average drop of just 1.3%, with the largest being 2.2% in 2014.
‘With the current realignment ongoing, however, and consumer demand only likely to increase after Christmas, it would be no surprise for a downward movement in excess of these figures.’
Biggest Used Car Price Rises
Source: Cap HPI November 2023 data – only six cars rose in value this month
- Suzuki Jimny: +9.8%, £2,150
- Dacia Logan Diesel: +4.0%, £325
- Dacia Logan: +3.5%, £252
- Mitsubishi Mirage: +2.7%, £216
- Nissan Micra Diesel: +2.0%, £190
- Jeep Wrangler: +0.9%, £290
In our video interview, Bulmer also addressed criticism the valuations provider had received from some dealers over its adjustment of pricing.
He said dealers rely on Cap HPI to ‘be as accurate as possible’ and pointed out that it only adjusts prices after evidence they had moved.
The firm said: ‘Values are adjusted within our Cap Live, daily, product based primarily off sold prices evidenced in the used market.
‘Data is received from a large number of industry sources, from large and small physical and online auctions, fleet and leasing companies, finance houses, rental companies and manufacturers used car programmes.
‘This all requires analysing by our team of editors and analysts, who also heavily reference the retail market, where we receive contractual advertised data from a number of high-volume used car websites.
‘No values are moved without evidence to do so. Movements are made based on fact, not opinion.’
Watch our video interview with Bulmer at the top of this story for the full interview.
