11:55 am, June 27, 2022
Used car values dipped slightly in June but the month was one of the strongest Junes for the past decade.
That’s the latest from Cap HPI. The firm’s head of valuations, Derren Martin, appeared on Car Dealer Live and explained the state of the used car market this month.
Values dipped by 0.9 per cent on average at the three-year/60,000-mile mark in June.
That’s 0.2 per cent lower than in May but June’s market was stronger than March and April’s which saw falls of 2.1 per cent on average.
Martin described the current market as ‘plateaued’ following strong rises in used car prices for most of 2021 and falls in early 2022.
‘We’ve never seen this before – low consumer demand and low supply,’ said Martin in the video posted at the top of this story.
‘You don’t normally have those two dynamics.
‘At the moment, because of the of the dynamics in the new car market and a lack of fleet returns, there’s not an abundance of cars out there. But also the demand is lower, so they’re levelling each other out to a degree.’
Despite the dip the market is still very strong.
‘It’s one of the strongest Junes we have seen for the past 10 years,’ said Martin
‘You can’t compare June to the same month last year as we were in a summer of strength when values were going crazy, but the June norm is around a 1.4 per cent drop, so June 2022 is half-a-per-cent stronger.
‘It’s a reasonably strong market, however many dealers are saying it’s not great for them.
‘They’re having to work really hard to stimulate demand and to close sales due to the cost of living squeeze.
‘We’re into holiday season as well and soon it’ll be school holidays. It’s tough but values aren’t dropping, which should give dealers a bit of confidence to buy cars for stock.’
Martin also revealed cars at the cheaper end of the used car market are now being squeezed.
‘Cars under the £5,000 mark have been really, really strong up to now but they’re starting to struggle.
‘The sweet spot is at the £12,000 mark as cars around £20,000 are starting to look a little expensive.’
Martin added cars at the cheaper, older (10-plus years) end of the market are also being affected as dealers are beginning to shy away from damaged stock, and favouring stock they can turn around quickly.
The rising costs of petrol are having a positive effect on prices of used electric cars, too, he said.
Prices for some models, such as the MG ZS EV, were up by as much as five per cent in June.
Meanwhile, diesels are making a downward movement after seeing strong rises during the height of the Covid pandemic, mostly due to high prices at the pumps in recent weeks.
