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Strong demand underpins used car values

James Dower, Cap HPI

Demand for used cars throughout September has underpinned a stronger than normal market, with overall price reductions at three years 60,000 miles of only 0.2%, says Cap HPI.

The automotive data expert said that the average monthly movement, over the last seven years has been more than triple this month’s figure, down by 0.7% at three years 60,000 miles.

An influx of nearly-new vehicles has applied pressure to the market for ten year/100,000-mile vehicles, however, with an average downward movement of 1.2%.

James Dower, senior Black Book editor at Cap HPI, said: “Caution should be applied to stock management running through the final months of the year. 

“September saw fewer quality cars available than the used car market required which, in turn, led to the stable used vehicle values.

“Historically, we move into a far more turbulent marketplace in the closing months of the year and, if history repeats itself, we are likely to see average monthly drops of more than 2% for the remainder of the year as high levels of stock hits the market.”

Convertible and Coupe Cabriolet saw sales performance continue to weaken with reductions of 2.4% and 3.4% respectively at the three year 60,000-mile mark.

City Car performed well through September and actually saw an average increase at three years 60,000 miles of 0.9%. The company reports no signs of excess stock in the marketplace and retail demand remained strong.

Electric vehicles continue to provide a challenge to retailers, however, and values saw a 1.4% drop at three years 60,000 miles and a 2.2% drop at six months 5,000 miles. 

Cap HPI said that the concern for this sector is that the continual growth in new car registrations is far from in-line with used car demand and, until the two become balanced, the market is likely to see the sector continue to come under price pressure.

Dower added: “We do predict that stock availability will change dramatically moving through October as significant de-fleets begin to hit remarketing channels and, as a consequence, believe that prices will fall as the month progresses.

“Daily values are available with Black book live, and we expect an increasingly volatile market in the months to come.”

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