Used car values rose by 0.4 per cent in July driven by strong demand a shortage of stock, new figures show.
Data from Cap HPI showed the small increase in used values, at the three-year and 60,000-mile point, in July was the first upward movement in the month since 2009 and followed an even stronger June.
Average values at the one-year point stayed level and vehicles younger than this dropped very slightly. At all other ages, there has been a small, positive movement, said the firm.
Showrooms remained busy in July, just like they were in June, and ‘pent-up demand’ was still prevalent in the market.
Derren Martin, head of valuations UK at Cap HPI said: ‘We have witnessed a relatively dramatic increase during June, then a stabilisation in July and it would appear that values have peaked but are remaining at or around that level for now. As always, there are winners and losers within these averages.’
The firm highlighted some electric cars and hybrids have struggled to hold their values, while SUVs now sit at 27 per cent of the used volumes, up from 20 per cent just two years ago, most of this being at the expense of upper-medium (D-sector) and MPVs.
Cap HPI said supply is high but so is demand with ‘some notable upwards movement’ in prices for the Audi Q2, BMW X1 and Range Rover Evoque. Where demand has not been so strong, values have dropped for models such as the Citroen C5 Aircross, Hyundai Kona and Kia Niro.
Martin added: ‘Convertibles have certainly been in demand over the last few weeks. In more normal times, trade values would have peaked in late-May or June and would now be heading south.
‘During July, values have increased by 2.4 per cent. The reasons for this can be put down to some pent-up demand, good weather, no excess supply and the previously mentioned dynamic of some consumers saving some money during lockdown, and now looking to buy a desirable or even an extra car as a toy.’
Older more affordable convertibles have increased in price the most in percentage terms, models such as the Audi A4 Convertible, the petrol variant of which has increased by an astonishing 32 per cent or £825 (at 10 years old) and the Audi TT Roadster, up around 11 per cent or £1,000 at five years old.
Martin concluded: ‘Last month we predicted that July would be stable with no reason to expect a drop in values, but the large increases experienced in June were unlikely to continue.
‘That is precisely what has happened. While there could be some very early signs of softening prices in August, we do forecast a relatively steady month, with possible drops to come from September onwards. When or if it comes, it is likely to be more acute for younger, higher value mainstream and premium cars.’
Derren Martin will be appearing on Car Dealer Live on Friday at 12pm
- Got a beef with your car manufacturer? Love your suppliers? Tell us why in our Car Dealer Power survey here.
- Get the latest news updates in our WhatsApp group. Broadcast only, headlines direct to your phone. Send us a message and ask to join here.
- There’s a fresh new design and exclusive content for Car Dealer! Download issue 149 for free here.