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WLTP-prompted slow September could see buyers turn to nearly-new cars

Derren Martin, head of current valuations at Cap HPI

Lower than usual car registrations numbers due to the switch to the WLTP vehicle emissions tests could see an increased number of car buyers invest in nearly-new alternatives, Cap HPI has said.

Derren Martin, head of current valuations at Cap HPI said while September is usually a very stable month for used car values – traditionally the “calm before the storm” before part-exchanges arrive into the wholesale market in large numbers – the legislation switch had “muddied the waters” this year.

He said that “more so than ever it is difficult to predict the next few months”, but suggested that the market could present opportunities to the used car sector.

“There is the likelihood of some manufacturers registering lower volumes than normal in September, and this may even stretch into quarter four and beyond,” said Martin.

“With fewer part-exchanges entering the market from this reduction, as some fleets extend their contracts by a few months, this could be good news for used car values beyond the immediate future.

“With demand unlikely to fall below where it seasonally is in the final four months of the year and even the potential for new car customers to be converted into late-plate used offerings.”

Cap HPI reported that the average black book live movement during September over the last five years has been just 0.1% down, and nothing untoward is expected this time around – last year the movement was an upward one of 0.5%.

The used market remained strong through August, it said, with overall values dropping by just 0.3% in Black Book live for both diesel and petrol cars at three years and 60,000 miles.

Cap HPI also said that diesel vehicles had retained their appeal with trade buyers as larger vehicles performed well in contrast to city cars, which were slightly weaker than the average during August.

The average SUV saw a drop in value of 0.4%, meanwhile. 

Some medium-sized SUVs have been in high demand, with retailers happy to pay “cap clean” values for them, and on average, there was a negligible 0.2% movement down, Cap HPI said.

However, larger variants such as the Alfa Romeo Stelvio, BMW X5, Land Rover Discovery and Mercedes GLE were harder hit, with an average drop of 0.9% on these model.

Martin said: “More so than ever it is difficult to predict the next few months, due to WLTP muddying the waters, however, it is our view that the final months of the year will be relatively strong for used car values.

“However, there are many models that stray away from average movements, so keeping a close watch on the detail within black book live is more important than ever at this time of year, to avoid underselling or overpaying.”

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