LOW supply of vehicles and steady demand saw used vehicle values stabilise in October, according to data and market insight firm Cap HPI.
October Live values saw a slight dip of 0.6 per cent at the three-year/60,000-mile point – the same as in October 2018 but less of a drop than in any other October since Live was introduced. The dip is equivalent to just over £100 on average.
With September registration volumes relatively low, large volumes of part-exchanges and fleet returns have failed to materialise in the open market, said Cap HPI. However, it added that because of an increase in pre-registration activity and potential short-cycle volumes from registrations in the first quarter, values of six-month and one-year-old vehicles have been adversely affected compared with older cars, dropping by 0.9 per cent and 0.8 per cent respectively. In monetary terms, these amount to around a £250 reduction for both, with petrol values again being hit harder than diesel ones.
Derren Martin, pictured, head of UK valuations at Cap HPI, said: ‘It is good to see stability return to the used car market. However, some manufacturers have continued to push pre-registrations and other short-cycle channels, which inevitably can have an effect on future residual values if cars returning into the used car market are not remarketed responsibly.’
The data also shows diesel cars are selling more quickly than petrol models on retail forecourts. Diesels have dropped by less in trade value too (0.4 per cent for diesel, 0.7 per cent for petrol), illustrating that in the used car market at least, diesel cars remain in demand, particularly larger vehicles. Upper medium (D sector) cars saw a marked difference between fuel types, with average diesel car values level, while petrol variants dropped by 1.1 per cent or £250 at three years old.
Electric vehicle volumes continue to increase in the market, and while for many models supply and demand are well matched, several models have been under price pressure. Some mainstream electric models that have dropped in value are the VW Golf, BMW i3 and Nissan Leaf. In particular, the Leaf has seen an increase in volume of two-year-old product.
Martin added: ‘So far this year it has been more important than ever to track values in real time, with a particularly volatile period from March through to August. It is just as important as the year draws to a close to do likewise.
‘Different models, ages and fuel types can vary quite dramatically in how their prices react in the used car market.’