11:53 am, March 28, 2023
Used car prices have jumped by 0.5 per cent in March, setting a new record in the process.
In an exclusive video interview, Cap HPI’s director of valuations Derren Martin said used car prices remain strong and March completed a robust first quarter.
Moreover, March’s 0.5 per cent increase in prices at the three-year/60,000-mile mark represented three months of increases in the first quarter – a new record and something the valuations expert hasn’t seen before.
‘It’s been another interesting month for values,’ Martin said in our video interview, which you can watch at the top of this story.
‘It’s fairly unusual that values go up this month, but they have done.
‘It’s the third month in a row that we’ve seen prices increase, albeit slightly. It’s been a strong first quarter – we’ve never had all three months [January, February and March] where there has been a valuation move up at the start of the year.’
Martin explained that there were caveats, though, with softening values of older cars and ‘volatility’ around electric cars.
‘Older cars have been strong but they can’t keep going up,’ he said.
‘[The softening] Is not just because these cars are older and cheaper, but dealers aren’t wanting to buy cars that need work at the moment.
‘Dealers want to buy cars that they can turn around quickly. Their margins have been slightly affected recently by wholesale prices going up, and being unable to push retail prices up because they’re already high because there’s a lot of competition.’
Values at the three-year/60,000-mile point for petrols and diesels rose by one per cent and 0.5 per cent respectively, while pure-electrics, hybrids and plug-in hybrids all fell by 5.4 per cent, 0.9 per cent and 0.6 per cent respectively.
It’s now dangerous to talk about EVs in general
Martin explained that falling EV prices are continuing to affect the overall picture.
He said that if electric vehicles are removed from the data, overall used car prices would have been 0.3 per cent higher at 0.8 per cent in March, and not the 0.5 per cent that was recorded.
The expert added the EV market is ‘volatile’ and that it’s ‘dangerous to talk about EVs in general on valuation terms, because there are lots of of different things happening to lots of different models’.
Prices of Tesla Model 3s, Jaguar I-Paces and Audi e-trons have levelled out with dealers beginning to stock them again, for example.
However, showing just how mixed the picture is, prices of the Volkswagen e-Golf dropped by over 10 per cent in March with similar falls for the Renault Zoe and Nissan Leaf.
‘When you’re talking about nine/ten per cent falls, they are big movements in a month – and that’s off the back of some previously high downward movements,’ he said.
Martin added that prices of EVs at the bottom end, such as the Renault Zoe, are very close to those of the Model 3.
‘Like it or not, the Model 3 has become the benchmark vehicle for EVs on price. There is still a little bit of movement to happen.’
Martin also explained that dealers are beginning to cautiously ‘dip their toes’ in stocking electric cars again after a few months of avoiding EVs.
‘There are no bargains to be had in the petrol and diesel world at the moment because prices are so high.
‘But there are some relative bargains to be had with EVs.’
More car dealers holding off buying electric used cars as prices plummet, reports BBC
