Used car values are more than seven per cent of where they were a year ago, new figures reveal.
Data from Cap HPI reveals that apart from a slight dip in early January and the 10-days prior to the lockdown announcement on March 23, used car values have risen every single month.
This month values increased at the three-year, 60,000-miles benchmark point by 0.4 per cent, or £65.
September marks the fourth month in a row since the end of the lockdown period that values have increased – as Cap HPI’s head of valuations, Derren Martin, recently told Car Dealer (in the video which you can watch at the top of this story).
The trend, however, is not sustainable warns the firm.
Commenting on the market, Martin said: ‘Demand picked up in September after a slight lull at the end of August.
‘Consumers are still buying for a number of reasons: to avoid public transport, to downsize to save money or upgrade to spend savings made over the summer period, because a finance agreement is ending or purely because they want a change.
‘All of this has led to a much-needed positive few months for used car dealers, after the dark days of lockdown. We hear very little negativity from retailers across the UK.
‘The positivity is clear, strong sales numbers and healthy margins are seeing retailers post incredibly good short-term results, turning a weak second-quarter into a very strong third.’
Cap HPI says petrol and diesel cars rose in value, on average, in September, while electric cars and petrol-hybrids have reduced once more.
City cars reduced slightly, but they have seen the biggest increases over the last few months.
All other mainstream sectors posted an average increase, while SUVs remained the most popular, increasing in value by one per cent or £150 on average, at the three-year old point.
Cap HPI says that currently there is no overall weakening of prices; however, this can be normal for September as higher volumes of cars only appear in high amounts from October onwards.
Martin concluded: ‘Whatever new car volume September brings, more of the part exchanges than normal will be retailed directly by franchise dealers, and this will likely keep auction stocks lower than is the norm for the time of year, helping to keep used values stronger than they may usually be at the start of the final quarter of the year.
‘Prices are higher than they were a year ago and have been steadily increasing for some time. That dynamic is not sustainable in the long-term, as shown by historical Cap HPI data.
‘Still, at the current time, there is no evidence of a dip, so any likely downturn could even be delayed by a number of months and into 2021.
‘Of course, there could well be some seasonal downward movements over the final quarter that are normal for the time of year.’