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Used car market becoming more ‘complex and volatile’, says Cap HPI

Derren Martin, head of UK valuations at Cap HPI

Fluctuations in the value of used cars and the wider adoption of ever-faster remarketing platforms have driven the used car market to become more “complex and volatile” in 2019, Cap HPI has reported.

A study of the used car market by the used car pricing specialist found that the number of value movements made by its team of editors has risen by 41% since the start of 2019, with March and August proving to be the year’s most volatile months to date and January the most stable.

Cap HPI reported a “market correction” through the first half of the year – as values declined following an unusually strong year in 2018 – but the declines slowed in August as the market stabilised with a fall of  1%,  the smallest fall since March.

Derren Martin, head of UK valuations at Cap HPI, said: "The data shows the used car market is becoming more complex and volatile.

“Used vehicles reach the wholesale market through a multitude of routes that all impact on values.

“We also see the pace of the market accelerating as vehicles from the fleet and retail sectors are remarketed faster than ever.

“We believe that the most accurate data is achieved by combining technology and an experienced eye, especially as the whole system becomes more volatile."

In a statement issued today (September 16) it said that its values are set using big data technology and a team of 14 editors who scrutinise trends and movements in the market. The data team is supported by data analysis and audit managers, who then ensure the quality of the data, it said.

In 2019 the Cap HPI has seen a drop in used values greater than the same month in the previous three-years.

It said that its Live values data points to a more stable period ahead as demand and values are more closely aligned.

Average diesel car values are consistently dropping by more than their petrol counterparts, with August seeing a 1.1% fall compared to 0.8%.

Martin said: "With the increasing number of models, powertrains, options, and acceleration in generations, it's clear that the used market will only become more complex as time progresses.

“And while we don't expect any major shifts in the overall market, we are seeing an increasing disparity and volatility between makes, models and powertrains as consumer tastes shift.

“We are strongly advising customers to use the real-time data available in our Live product.”

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