Used car values up 16.6%, reports Cap HPI
Used car values are continuing to rocket, having risen by 16.6% or £2,125 in the last four months, according to Cap.
Its daily produced Live trade values has revealed an overall increase of 3.1% at the three-year point during the month of July, equivalent to over £425 per car.
Added in to the 4.8% increase during June and the 6.7% increase during May, this gives the 16.6% increase. Over the same period, one-year-old cars are up by over £3,000.
Derren Martin, head of valuations at Cap HPI, commented: “Despite a number of distractions for consumers over the last month, such as England’s progression to the final of Euro 2020; high numbers of people self-isolating; hot, sunny weather; and the school holidays, consumer demand has remained very healthy.”
And, as reported by Cap HPI last month, this is starting to influence retailer pricing by dealers.
“There has been a notable rise in retail advertised prices over the last few weeks, as evidenced within our retail data. In previous months, despite wholesale values increasing extraordinarily, retail prices did not keep track. Dealers had to pay high prices for cars but could not price them high enough to maintain margins. Now, many retailers have pushed prices up, margins have increased and dealers are upbeat. Volumes may be down in June, but profitability is up.”
It’s not just diesel and petrol cars seeing increases in price, and average values of three-year-old and older electric vehicles have actually risen at a faster pace; Tesla Model X and S are showing some of the largest increases. With long lead times on new cars, an increase in the acceptance of EV technology, and improved disposable income, strong demand is now showing through.
However, Cap HPI added that whilst values may continue their upward trajectory, the slowdown may have started. The team’s data shows slightly reduced levels of sold trade data and, although not dramatic, a theme is developing.
Auction volumes are slightly lower, despite conversion rates being higher, and trade sales from direct remarketers are down, as they simply do not have new car supply to allow them to de-fleet vehicles.