Cap HPI has warned that a “stable” used car market could suffer under the double-pronged pressure points of increasing volumes and an more nearly-new vehicles in the market.

Strong retail demand has supported used values in August with a reduction of 0.7% at the three-years and 60,000 miles, according to cap hpi.

The automotive data experts say the stable market is due to consistent performances across sales channels, and is steadier than the 1.6% reduction experienced during July – mirroring September 2015’s decline of 0.6%. 

But James Dower, senior editor of Cap HPI’s Black Book, said: “There are likely to be two pressure points moving forwards, the nearly new market and also potentially higher volumes of stock entering the used car arena. 

“The majority of manufacturers still have significant volume aspirations for the remainder of the year and the new car retail performance in September will dictate just how far reaching the effect of pre-registration activity will be over the used car market in the final months of the year. 

“With ongoing reports of dealer stock at such high levels, another wave of pre-registered cars could continue to put pressure on cash flow and stocking plans leading to increased stress on margins and profitability.

“Stock management, stock turn and realistic retail pricing have always been key to used car success and will be critical throughout the month.”

Auction activity remained strong though August and an easing in stock levels led to conversion rates holding well through August.

City car performance has been unusually strong with a reduction of only 0.7%.

When compared with the average reductions of 2.1% over the previous four months it found some traction moving into September. 

Dower suggested that the strength of city cars might temper over the coming months, however, adding: “It’s a sector that is usually significantly impacted by tactical registrations alongside aggressive new car marketing campaigns, so while the data has led to only slight erosion into the month, an eye must be kept on activity over the next few weeks.”

SUV sales remained stable with an average downward movement of 0.4% into September at three years 60,000 miles. 

Cap HPI has reported significant strength within the larger derivatives and the true 4x4 models with low stock volumes driving a premium sale price. 

The medium size SUV’s are not quite showing the same level of strength.

Lower Medium saw a little more stability with an overall movement of 0.8%. 

Late plate derivatives are under pressure due to high volumes.

Dower said: “Supermini saw values fall by 0.7%, and while the price has remained relatively stable, a keen eye must be kept on September new car activity in this sector as we have observed some of the historical tactical registration activity impacting values.”

The upper-medium sector performed in-line with the overall average movement of 0.7% reduction at three years 60,000 miles.

Diesel derivatives within the data moved down by 1%, in contrast to petrol examples that averaged a 0.2% reduction, as higher volumes of diesel vehicles found their way into the market.