Used car values remained robust in August, supported by strong wholesale demand.

Values have been largely stable since the start of the year

On average, August values fell by 0.6% at the three-year age point, according to experts at Cap HPI – compared to a seasonal norm of a 0.7% decline.

The last four months have proved notable due to the robust market performance. Values have dropped by an average of just 0.5% per month and 2.0% in total. 2018 was dubbed ‘the year of the used car’ due to market strength, but even in that year, values dropped by 3% over the summer.

Dealer demand for battery electric vehicles (BEVs) outpaced petrol in August, shown by a notable improvement in auction conversion rates. The current average for BEVs is 1.3 sales attempts, while petrol vehicles have an average of 1.5 sales attempts before selling.

Derren Martin, director of valuations at Cap HPI, said: “It seems used car prices reached a fair level for retailers and consumers at the start of 2024, and as a result, they have been largely stable ever since. There are nuances within this, and where supply outstrips demand for certain models and fuel types, values have fallen, but as an average, used car prices have experienced a stable year thus far.”

At the one-year age point, values also dropped by an average of 0.6% (c.£250), with older ages slightly more affected in percentage terms, 10-year-old values dropping by 2.1% on average, or £85.

MPVs have dropped more than the other mainstream sectors, down 1.3% on average but similar to previous years.

The lower medium (C-sector), supermini and SUV segments, which make up over 75% of the sold trade data received so far this year, all dropped by around the 0.5% mark, illustrating the stability in the market even where there is volume.

Pure hybrids were the best-performing fuel type over the last month, dropping by an average of 0.2%. Petrol cars fell by 0.6% on average.

EVs decreased by an average of 1.0% (c.£240), and plug-in hybrids experienced a similar decline.

BEVs have now experienced a full two years of monthly value drops, although the rate of decline has slowed.

Since September 2022, BEVs have seen their used values decrease by over 60%. However, a number of electric models have experienced an increase in values. The Audi Q4 E-Tron Sportback, Ford Mustang Mach-E, MG5, Nissan Leaf, Peugeot e-2008 and the Tesla Model S all went up at the three-year age point.

All eyes are now on the final quarter of the year – 2023 saw values drop by an average of 10.5% from October to December but Cap HPI said it’s highly unlikely that there will be a repeat in 2024.

Martin explained: “There will not be the same high volumes of defleets all at the same time, interest rates are more stable and cost-of-living concerns less prevalent, meaning less of a drop in demand.

“Flies in the ointment can always appear, and the new car market will be one to watch. However, if manufacturers deliberately reduce sales of ICE cars to assist with their ZEV mandate targets, this could make similar used models more desirable.”