7:14 am, February 24, 2023
Used car prices have risen by one per cent in February as confidence grows in the used car market, says trade price valuations experts Cap HPI.
In an exclusive video interview, director of valuations Derren Martin reveals February’s used car pricing performance has been one of the strongest ever recorded by the firm.
The firm has only moved valuations up in February twice in the past 15 years – once in 2009 after the financial crash caused used values to surge, and in 2020 just before Covid hit the market.
The one per cent rise is based on the benchmark: cars aged three years old with average mileage. One-year-old cars have seen a very small increase in February of 0.1 per cent.
Three-year-old petrol cars increased by an average of 1.5 per cent and diesel cars were up 1.1 per cent.
Electric cars, though, have continued their tailspin in values dropping 7.7 per cent at three years old, the equivalent of £2,150.
However, Martin said he was now more confident about the health of the used car market, notwithstanding those falls in EV prices.
He said: ‘It’s a robust market out there and used cars are a necessity purchase and people still want them.
‘Dealers didn’t overstock in December so as the market has been strong in January and February they’ve been going out there and replenishing stock.
‘There’s been a bit of a bunfight for cars, especially at the lower end – there’s still a real shortage of cars out there so, as always, it’s down to supply and demand dynamics.’
Martin tells us in the video interview that the strongest sectors have been city cars and superminis, followed by C segment cars.
‘It’s relatively strong across the board,’ he added. ‘We haven’t spoken to a single dealer this month that has not done really well.’
More big EV drops
As has been the theme in recent months, electric vehicle valuations have dragged the market down.
Cap HPI said Tesla Model 3 values reduced by 4 per cent (£1,325) in February after dropping more than 10 per cent in January. This equates to more than £5,000 over the last two months and almost £12,000 over the past four months.
But there have been signs values of the Model 3 have started to stabilise in the latter part of this month.
The Tesla Model Y dropped 5.6 per cent (£2,450) in February and over the past four months has lost £13,000.
Teslas are not the only electric cars being hit – the VW Golf E, Nissan Leaf, Renault Zoe and Hyuindai Ioniq have all fallen by more than 10 per cent in a month.
Biggest February used car fallers
Source: Cap HPI data, three year old cars, 60k miles, comparing February values to January 2023
- VW Golf E -15.1% (£2,300)
- Tesla Model S -14.3% (£5,617)
- Tesla Model X -12.5% (£6,178)
- Renault Zoe -10.6% (£1,192)
- Nissan Leaf -10.6% (£1,469)
- Hyundai Ioniq -10.1% (£1,475)
- Kia Soul Electric -9.7% (£1,400)
- Peugeot 2008 Electric -9.7% (£1,615)
- MG ZS Electric -8.9% (£1,275)
- Audi E-tron Sportback -8.9% (£3,713)
Martin said: ‘There’s a continuation of a theme with electric vehicles. It’s still such a small part of the market, but it’s what everybody wants to talk about.
‘I didn’t think I would see values drop by as much in such a short period of time – some cars have dropped by upwards of 11 per cent this month and we’ve seen further drops for those cars that dropped in January – we’ve got cars that have dropped by £1000s, since October.’
Martin said some car dealers have been liquidating their EV stock and selling cars very cheaply to ‘get rid of them’, but those sales have not been reflected in this latest update.
‘EVs have come down by an average of 7.7 per cent for three years,’ he added.
Biggest February used car risers
Source: Cap HPI data, three year old cars, 60k miles, comparing February values to January 2023
- Mitsubishi Mirage +9.1% (£608)
- Honda HR-V diesel +8.3% (£1,017)
- BMW 4 Series Convertible +8.2% (£1,460)
- Dacia Logan +8.1% (£540)
- Ssangyong Tivoli +7.1% (£723)
- Mercedes SL +7.1% (£2,375)
- Smart Fortwo Cabriolet +7.1% (£600)
- Fiat Panda +6.2% (£459)
- Ford C-Max diesel +6.1% (£629)
- Vauxhall Mokka +5.5% (£557)
Looking ahead to March values and the rest of the year, Martin said he thinks it will be ‘relatively strong’.
He said: ‘Easter tends to be a bit of a watershed for when values can start to drop. That’s not till mid April this year. So we might have a relatively stable market until Easter time.
‘I would paint a fairly positive picture. I would expect petrol and diesel cars to see another small uplift during March.’
After Easter, the used car market will be ‘more normal’, explained Martin.
He said: ‘We would normally say values would go down by between three and five per cent in a normal year – I think it will be at the strong end of that, maybe maybe even slightly better.’
We’ll be discussing the used car market with Google and headline sponsors Auto Trader at the forthcoming Car Dealer Live conference on March 9 at the British Motor Museum at Gaydon. There are a handful of tickets left here.
