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Supply constraints see used car values defy seasonal trends

Derren Martin, head of UK valuations at Cap HPI

Supply constraints triggered by the introduction of WLTP have resulted in used car values that have defied the usual season trends, according to Cap HPI.

The vehicle data specialist said that used car values dropped by just 1.5% at three years and 60,000 miles during November, compared to a usual decline of 2.3%, as a result of reduced stock availability and warned “used car supply will almost certainly stay steady in the short-term”.

Cap HPI noted that the used car market had varied between sectors this month, with the value of larger 4x4s only dropping by 0.9%.

Small and medium SUVs fell by 1.4% and 1.5%, meanwhile, as drops experienced in the city car, supermini, lower and upper medium were more reflective of the seasonal norm – down by 1.6%.

Derren Martin, head of UK valuations at Cap HPI, said: “New car supply is unlikely to dramatically increase in the last month of the year, with WLTP supply constraints evident for some manufacturers for the next few months at least.

“It will be interesting, however, to see if those that are in a position to do so chase volume and market share which could lead to a strong month for rental registrations as well as increased pre-registration activity.

“Used car supply will almost certainly stay steady in the short-term, however. Consumer demand will continue to fall, although some trade buyers will be active in December, stocking up for the New Year.”

Cap HPI reported that the electric sector had been particularly strong in recent weeks, arguing that consumer acceptance of electric cars is on the increase.

It said: “Smaller electric cars, in particular, are more in vogue than ever and the resulting demand is supporting values. In particular, the Nissan Leaf, Peugeot iOn and Renault Zoe models continued to appreciate in value.”

Overall, petrol and diesel car values behaved similarly to each other in November, according to Cap HPI, continuing the trend that the used car buyer is less concerned by fuel-type than the new car buyer, who tends to be led more by fiscal reasons.

Martin said: “Looking slightly further ahead, the first quarter of 2019 will be an interesting one. A healthy start to the year is likely, and prices will likely stay high.

“What is clear is that any price movements will be very manufacturer and model specific, meaning an eye on the detail, as reflected in Black Book live, is essential for vendors and buyers alike.” 

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