Average used car values remained steady in September, moving down by 0.7% at the 3-year, 60,000 mile point.
With supply dropping in some quarters, and demand steady, the main downward pressure was from those buyers refusing to pay what they deemed as high prices for cars when they expect values to drop over the coming weeks, said CAP
Derren Martin (pictured), senior editor, CAP Black Book, said: “The used car retail market remained buoyant in September.
“Although some pressure was reported as dealers moved buyers from used to new thanks to record low deposit and attractive monthly payments, and in order to hit their challenging new car targets set by manufacturers.
“A number of large dealer groups are reporting PCP penetration as high as 95% on new car sales. Longer term, if this trend increases, there could be additional pressure on used values as the volume of cars increase and used car demand declines.”
The volumes of cars being put through auctions declined throughout August and most of September, whilst still remaining ahead of where they were at the same point in the last few years.
“Conversion rates were aided by the expected influx of part-exchanges and fleet returns not yet having materialised to any great degree.
CAP warns used price drops are likely to accelerate over the coming months due to increasing volumes and demand tending to drop away in the final quarter, as consumers focus switches away from car buying until the New Year.
Martin said: “What happened throughout October, November and December last year were value drops at on average 2.4% a month, the highest drops being during November, resulting in an average 3.1% reduction in values for December’s monthly Black Book.”
Convertibles and coupe cabriolets were the most heavily affected by reductions in what buyers were prepared to pay.
The size of the drop is earlier and larger than in recent years, with average values down by 3 to 4%, a far higher drop than all other sectors.
To keep pace with any price drops, Black Book Live produces used car values on a daily basis, reacting to changes in the market as they happen, by constantly analysing, in real-time, sold trade data.