Used car average values fell in December but the outlook for January and beyond is optimistic, Cap HPI has reported.

While the overall used car market adjusts seasonally, it remains relatively stable

December average values dropped 1.5% or some £260 in the three-year-old, 60,000-mile bracket. Across this demographic, approximately 60% of cars fell in value, 35% remained stable and 5% saw an increase.

The slowdown for the retail and wholesale sectors aligns with typical seasonal patterns. December 2023 saw a drop of 2.1% at the three-year age point, following two previous months of reductions of 4.2%. It resulted in a cumulative decline of 10.5% over those three months.

But Q4 2024 showed much greater resilience, with a cumulative movement of 4.2%, highlighting the robustness of the market during this period.

And while the average days to sell in the Cap HPI retail advert database stood at 43 in December, this was only slightly up from 41 in November.

Active trade buyers are “highly selective” though, focusing on vehicles with clean mechanical and cosmetic condition reports, good specifications, provenance, desirable colours, low mileage and competitive pricing, according to Chris Plumb, head of current car valuation at Cap HPI.

In contrast, vehicles requiring mechanical repairs or significant cosmetic improvements continue to pose challenges for vendors, and such stock often requires multiple attempts to sell and typically achieves lower returns compared to Cap Clean values.

Performances across the different fuel types were comparable at the three-year point. Petrol cars recorded the largest decline for the second consecutive month, down 1.8% (£270). PHEVs followed with a 1.6% fall (£350), with BEVs down 1.4% (£280). HEVs and diesel vehicles performed best, both registering declines of 1.2% (£210).

Cap HPI data also shows the wholesale BEV market continues to evolve, with encouraging trends throughout 2024 as it adapts to a shifting landscape. Retail days to sale have increased but auction sales attempts for BEVs are now comparable to those for other fuel types. And 2024 looks set to break records for used BEV sold volumes, marking a 90% increase over 2023 and surpassing the combined totals seen from 2019 to 2023.

Chris Plumb, head of current car valuation at Cap HPI

For 2025, Cap says low supply will continue to play a key role in maintaining healthy competition and demand for used car stock, while projected consumer demand remains encouraging.

Chris Plumb concluded: “2024 has been a successful year for both vendors and retailers. Reduced used car stock volumes returning to the market and healthy retail consumer demand have underpinned market stability. At this stage, there is no reason to believe that the first quarter of 2025 will differ significantly in terms of demand and overall stability.”