8:15 am, April 25, 2023
Used car values in April have fallen for the first time this year – but there’s no price crash on the way.
In an exclusive video interview with Car Dealer (above), Cap HPI director of valuations Derren Martin revealed the drop in values this month was actually the second best April performance the firm had ever recorded.
Overall used cars declined an average of £200 (one per cent) in the month.
However, taking into account the 2.5 per cent cumulative rise over the last three months, used car prices have still grown 1.5 per cent this year.
Cap HPI records trade values – the price dealers pay each other before putting a retail margin on top to sell to consumers – for three-year-old used cars with 60,000 miles.
In April, electric cars were the worst performing with values dropping 4.7 per cent, petrol cars dropped 0.8 per cent and diesels fell back 0.9 per cent.
But Martin explained April was a month when used car values traditionally dropped due to a large influx of supply from part exchanges in March.
In the video, which you can watch above, he said: ‘In general, the average during April is a 1.4 or 1.6 per cent ish drop, so we’re on the positive side of that.
‘Anyone suggesting this is the start of a big sort of drop I would say to them that is definitely not not going to happen.’
Martin said as well as the influx of used cars coming into the market in April from the new 23-plate part exchanges, the month was also quieter due to holidays around Easter.
Martin explained: ‘The market sort of switches off to a small degree over the Easter period. So you get less demand and you get more supply, which generally leads to values dropping.’
However, the downwards pressure on used electric car prices had continued with EVs dominating the top 10 biggest fallers.
Used cars: Top 10 biggest fallers in April
Source: Cap HPI
- Vauxhall Vivaro Life Electric -11.5% (£2,263)
- Seat Mii Electric -11.5% (£1,125)
- Hyundai Kona Electric -10.6% (£1,575)
- Citroen C4 Electric -8.8% (£1,200)
- Vauxhall Corsa Electric -8.8% (£1,033)
- Fiat 500 Electric -8.8% (£1,000)
- Kia Soul Electric -8.8% (£1,050)
- MG MG5 -8.7% (£1,125)
- Vauxhall Mokka Electric -8.7% (£1,288)
- Volkswagen Up Electric -8% (£900)
Martin said: ‘This is the eighth month of drops now for EVs which adds up to about 34-35% over that period of time – I can’t say that flippantly really, as that is a hell of a drop over that period of time.
‘The drops this month are slightly less than the previous three months, so you could argue there’s a bit of a stabilisation there.’
Tesla prices took a huge hit at the start of the year, but the big falls in value for Model 3 have tailed off, dropping three per cent in April.
Cap HPI says that has now put pressure on other EVs that haven’t dropped as sharply as they now look overpriced compared to a Tesla which, for many buyers, is still more desirable.
Martin said: ‘I think the pressure is on the cars that are close to the values of the Model 3.
‘Where the Model 3 has come down by about £13-14k over this period of time, something like the Nissan Leaf has only come down by £8k.
‘In percentage terms, the Leaf has come down more but it now sits a lot closer to the Model 3. So, if you go in as a consumer to buy an EV and maybe you’re looking for that lower end you suddenly realise that for £20,000 you can get an aspirational Tesla, then it puts the other cars under more pressure.
‘That’s definitely what we’ve seen with some of the movements this month.’
Martin added that he thinks there are still ‘more drops to come’ with used EV prices.
Looking ahead to May used car values, Martin said it was hard to predict what impact three bank holidays would have on the market.
He said some dealers were worried it would hit demand while others are seeing it as an opportunity, especially if the weather is poor.
‘People go out and look at cars on wet bank holiday Mondays as there’s not much else to do,’ he added.
