Average car values saw a return to seasonal norms in April as values fell while volumes rose.

Average values at the three-year, 60,000-mile point have dropped by 1.5% in April

Values at the three-year, 60,000-mile point dropped by 1.5%, equivalent to around £300, according to Cap HPI.

The fall follows an overall rise in values of 0.5% over the first quarter of the year and reflects a gentle softening in demand and an increase in supply. The 1.5% drop in April compares to an average 1.2% fall for the month over the last 12 years, since Cap Live was introduced.

Values at the one-year age point declined by 1.3%, with a 2.0% fall at five years old and 3.0% at the 10-year point.

Data analysis shows the trade and retail markets in the run-up to Easter were healthy, with a slight dip after the bank holiday weekend. The dip was in line with what typically happens at this time of year.

Derren Martin, director of valuations at Cap HPI said: “The market feels healthy,  but a number of retailers have expressed that demand is slightly below where they had hoped and budgeted for, after a robust first quarter.

“Petrol-engine vehicles have continued to be the flavour of the month, with dealers comfortable that they will sell these quicker than other fuel types. Interestingly, BEVs and diesel-engine cars have been the slowest to sell, making dealers wary about overstocking.”

All sectors experienced an average drop in values at the three-year age point in April’s Cap Live, with the exception of convertibles and coupe cabriolets as the weather gets warmer.

Upper medium, or D-segment, cars dropped by the most, with BEV and diesel models most heavily affected. Volumes continue to reduce in this sector, with the overall share of the used market for these cars halving over the last 10 years.

BEVs saw the largest average decline, dropping by 3.7%, around £780 on average, compared to petrol at 1.0% or £200 and diesel at 1.9% or £380. It is the largest BEV value drop since June of last year.

Models that have seen notable drops in value include the Toyota bZ4X (-12.5%/£2,800), Nissan Leaf (-8.5%/£800), Polestar 2 (-7.0%/£1,300), Ford Mustang Mach-E (-5.5%/£1,225) and Volkswagen ID.3 (-5.0%/£650).

In contrast, the Honda e, Lexus UX and Seat Mii all remained level, while the Mini Cooper (1.0%/£100) and Cupra Born (2.1%/£300) experienced an increase in value.

Looking ahead, Cap HPI says values could see a slight fall in May – traditionally one of the more difficult months of the year.

Martin elaborated: “The average May movement in values since 2012, excluding 2020 and 2021 due to the highly unusual used market in those years, was -1.6%. So, if we are returning to seasonal norms, somewhere close to this average would not be a shock.”

Cap also predicts continued mixed-value moves for battery electric models.

“There have been some incredibly large drops this month, which may help stimulate demand, but there could also be some large movements to come for some cars as they continue to find their place in the market.”

While Cap’s data indicates a seasonal softening in line with pre-Covid trends, the National Association of Motor Auctions (NAMA) said retail feedback has remained positive, reflecting sustained consumer confidence.

April reflects stability amidst market dynamics, says NAMA

Paul Hill, NAMA spokesperson, said: “The market continues to exhibit stability amidst evolving dynamics, reflecting resilience and adaptability within the automotive industry.”

Although data availability was slightly lower compared to previous weeks, trends remained consistent with previous years. While no significant movements were observed, next month’s reduction is anticipated to be around 1%, maintaining a stable market. However, conversion rates were noted to be tailing off slightly, which is expected around this time of year.

Paul Hill said: “Buyers were observed to be increasingly selective, particularly with older vehicles, despite their cost. It was emphasised that pricing should be in line with the condition of the vehicle, as mechanical issues were found to be more problematic than cosmetic issues.

“The effect of ULEZ regulations was noted, with dealers on the periphery of the zone preferring newer vehicles.”

Hill concluded: “The April 2024 market call underscores a stable market environment, with opportunities and challenges across various segments.”