Used car values rose by 0.4% during July as automotive retail's lockdown recovery delivered the month’s first price rise since 2009, Cap HPI has reported.
Strong demand and a shortage of supply triggered by pent-up demand experienced following the June 1 re-opening of England’s car showrooms was credited for the increase in used values at the three-year and 60,000-mile point in July, which followed an even stronger June.
Cap HPI reported that average values at the one-year point had stayed level and vehicles younger than this dropped very slightly.
At all other ages, there has been a small, positive movement.
While Derren Martin, Cap HPI’s head of valuations UK, told AM earlier this month that the used car market could be destined for the kind of “market correction” seen in May last year, it seems that the market is beginning to stabilise.
Martin said: “We have witnessed a relatively dramatic increase during June, then a stabilisation in July and it would appear that values have peaked but are remaining at or around that level for now.”
Cap HPI today (July 29) gave detail of the pricing trends’ winners and losers and winners in July’s market.
It said that some Electric Vehicles (EVs) and hybrids have struggled, despite a lockdown debate about the potential increase in demand for alternative fuelled vehicles (AFV) as reduced travel resulted in cleaner air around larger cities.
However, AFVs’ relatively high cost versus internal combustion engine (ICE) cars means that consumers currently find the premiums too expensive over a petrol or diesel vehicle, it said, adding that there also remained concerns about the range of pure electric vehicles (EV).
SUVs now account for 27% of used volumes, meanwhile, up from 20% just two years ago and the trend looks set to rise.
Yesterday (July 28), Jato Dynamics reported an increase in SUVs' market share to 40% across Europe in its new car registrations report for June.
The rise of SUVs continues to come at the expense of upper-medium (D-sector) and MPVs.
Notable growth in used values has been seen in the Audi Q2, BMW X1 and Land Rover Evoque, while values have dropped for models such as the Citroen C5 Aircross, Hyundai Kona and Kia Niro.
Martin said: “Convertibles have certainly been in demand over the last few weeks.
“In more normal times, trade values would have peaked in late-May or June and would now be heading south.
“During July, values have increased by 2.4%. The reasons for this can be put down to some pent-up demand, good weather, no excess supply and the previously mentioned dynamic of some consumers saving some money during lockdown, and now looking to buy a desirable or even an extra car as a toy.”
Older more affordable convertibles have increased in price the most in percentage terms, models such as the Audi A4 Convertible, the petrol variant of which has increased by a phenomenal 32% or £825 (at 10-years old) and the Audi TT Roadster, up by over 11% or £1,000 at five-years-old.
Martin said: “Last month we predicted that July would be stable with no reason to expect a drop in values, but the large increases experienced in June were unlikely to continue.
“That is precisely what has happened. While there could be some very early signs of softening prices in August, we do forecast a relatively steady month, with possible drops to come from September onwards.
“When or if it comes, it is likely to be more acute for younger, higher value mainstream and premium cars.”