August Sees a Slight 0.6% Drop in Used Car Prices as Demand Stays Robust

Cap HPI informed that used car prices dropped by a mere 0.6% in August, indicating a highly stable market for pre-owned vehicles.

During an appearance on Car Dealer Live, Derren Martin, Cap HPI’s valuations director, explained that the 0.6% decline—about £140 on a three-year-old vehicle—reflects the month’s alignment with seasonal norms and indicates strong current demand.

‘August adhered to usual seasonal patterns, however, the key difference is that this strength has been present since May.’
‘Over a span of four months, we've only seen a total drop of 2%, so this decline is very minor overall.’

He added: ‘Retailer demand remains robust, and consumer interest hasn’t significantly waned, especially with the holiday season. Some dealers even reported that August outperformed July, which is rather uncommon.'
'Dealers are now restocking inventory. Previously, they avoided overstocking due to interest rates, but they’re now realizing there’s a shortage of three-year-old prime stock cars, a result of the semiconductor crisis three years ago and the 2020 Covid pandemic.'

'For two years, registrations were low, and that’s now impacting the used car market.'
"The market remains quite stable, with balanced supply and steady demand keeping things on an even keel."

"In August, petrol cars, especially superminis and family hatchbacks, continued to sell quickly from dealers’ lots, with diesel prices holding steady and selling well, too."

"It’s fascinating that electric vehicles priced under £20,000 are sometimes selling faster than petrol cars," he noted.

"EVs are moving quickly off lots, and we're seeing larger profit margins."

"Our research indicates that fewer than 20% of independent dealers have listed an EV in the past six months, meaning 80% aren’t engaging with them at all. Additionally, less than half of franchise dealers have advertised EVs, leaving plenty of potential untapped."

"We’ve surpassed the total EV sales of last year already in the trade market this year. Dealers who aren’t stocking EVs right now might be missing out on a significant opportunity."

"Looking forward, Martin noted that September should remain stable, but there might be some market fluctuations as the ZEV mandate starts to take effect later in the year."

"September is expected to be steady – while values fell by 10.5% in October, November, and December last year, we don’t anticipate a repeat of that trend."

"Mandating regulations in an industry often leads to volatility, and this can also affect the used market. While I anticipate some price adjustments, as typically happens in Q4, they won't be as significant as last year's changes."

Check a huge variety of second-hand cars in Milton Keynes at Hilton Car Supermarket.

Source and Image: CarDealerMagazine