Convertibles and city cars outperformed the market by increasing their value in a used car climate of decreased margins but “healthy demand”, Cap HPI has reported.
Stable used values were recorded in Black Book live during March with a small average increase of 0.1%, but while the average three-year-old/60,000-mile vehicle saw a minimal increase, convertible prices increased by 1.6% and city cars by 0.5%.
Derren Martin, senior editor of Black Book, said that supply and demand had been well matched in the used car market so far in 2016, with the number of used cars sold so far this year is up 7.7% year-on-year, stating: “The increased volumes of vehicles are finding homes.”
Martin added: “On the whole, trade values have been very stable since the turn of the year, with average reductions in Black Book live since that time being less than 1% and in the case of city cars, values have actually been on the increase.
“This theme continued during March, although there were some very early signs of some prices tailing off slightly in the week leading up to Easter.”
Cap HPI said that strong overall trade values since early January had resulted in a compression of dealer margins and early signs that customers were becoming reluctant to pay the high prices in the market.
Volkswagen’s Golf hatchback seems to have weathered any negative press from the dieselgate emissions scandal.
The hatchback fared well mainstream models in Black Book live showed some variance, even within the same sector.
While the Ford Focus and Peugeot 308s dropped in value, Volkswagen Golfs and Volvo V40s increased, Cap HPI revealed.
Feedback received by Cap HPI points towards pre-registration activity being fairly light year-to-date, but this was predicted to change during the final few days of March at the time of the report.
More than one-third of franchise dealers questioned by Cap HPI reported that pre-registrations were likely to make up over 16% of the total in the first quarter of 2016.
Auction conversion rates remained healthy. Cap HPI’s data showed a 14% increase in cars sold through auction, compared to the same number of working days in March 2015, illustrating the strength of the used car market this year.
Martin said: “Due to steady registration increases since 2012, there are now more cars in the used car market than there have been over recent years, plus increased pressure from new car, particularly finance, offers.
“There will also be an abundance of late-plate cars appearing in the market over the next few months, indeed ‘16’-plates were already being advertised on popular used car websites from the early days of March.
“Add in the pressure being applied on margins and it all seems to point in the same direction.
“This negative sentiment, however, does need to be tempered with the fact that retail demand for used cars remains healthy – consumers are still actively buying, interest rates are low, and the economy remains strong.”