Used car values stabilised in January, marking an end to the volatility seen since October 2023.

January values were down by a negligible 0.1%, following the 10.5% drop seen over the October-December 2023 period

New figures from Cap HPI reveal used values at the three-year/60,000-mile point dropped by a negligible 0.1%, equivalent to a £90 fall on average.

It’s a major turnaround from the average 10.5% drop seen over the October-December 2023 period – the result of a ‘perfect storm’ of heavier supply, lower demand, high used car prices and lower-than-market values for fleet companies’ residual values on stock returning to the market.

The 0.1% decline is also the strongest performance in a month since March last year and is in line with the average movement in January, which sits at -0.3% for the previous eleven Januarys since Cap Live was introduced. It’s also the fourth most positive January in that period, the strongest being a 0.6% increase in 2020.

Derren Martin, director of valuations at Cap HPI, said that if the monthly deadline cut-off had been a couple of days later, the monthly movement reported for January would likely have been a small positive one.

Values did fall slightly more at younger ages, with a 0.5% decline at one-year/10,000 miles, equivalent to c.£285 – due to some keen new car offers and year-end pre-registration activity – but Cap noted that the fall was small here too.

At older ages, there was a 0.1% drop at five years old and 0.3% at 10 years, equivalent to average drops of just £50 and £20, respectively.

Analysis of performance by powertrain type reveals some bigger disparities though.

The data for petrol, diesel and pure hybrid cars alone shows the average movement at three years old is a positive of 0.1%, and a negligible 0.1% move down at one year old.

Battery electric vehicles (BEVs) and plug-in hybrids fell by 1.8% at the three-year age point, equivalent to over £425, with BEVs dropping by 1.9% (c.£720) at one-year-old.

But there is some positivity for BEVs, with the Nissan Leaf and Renault Zoe looking competitively priced now and not moving in January, while the Mercedes-Benz EQC, electric BMW i3 and Mini Convertible Electric all increased in value in the month.

Derren Martin concluded: “Over the coming weeks, we are not expecting a downturn in fortunes, and as stated, January has improved the longer it has gone on.

“Last February, values went up by 1% in Cap Live and then a further 0.5% in March, before they started to drop from April. It would not be a surprise to see something similar for the next few months this time around.”