Used car values at three years / 60,000 miles fell by 2.1% in December, getting closer to normal seasonal movements, according to Cap HPI.

Values at three years / 60,000 miles have fallen by 10.5% or around £2,000 in the last three months

The fall comes on the back of a cumulative drop of 8.4% over the last two months after prices “realigned considerably” – but Cap said the latest drop fitted with seasonal norms. It pointed out that the average December movement over the last 10 years was a fall of 1.3%, with the largest drop being 2.2% in 2014.

The December decline means values at three years / 60,000 miles have fallen by 10.5% or around £2,000 in the last three months.

But Derren Martin, director of valuations at Cap HPI, said it was important to remember the context behind the moves.

“In a six-month period in 2021, values increased by almost 30%, equivalent to over £5,500 on average, and they had barely dropped until the last few months. Average used car values remain around 13% above where they were at the start of 2021.”

At the one-year age point, values dropped by 1.8% or £550, while at older ages, there was a 2.1% (c.£250) drop at five years old and just a 1.4% (£75) reduction at 10 years old. The cheaper end of the market is holding up better when cars are in the right condition.

All mainstream sectors experienced similar percentage drops, with the largest volume sector, SUV, dropping by 2.0% or around £400. The three models that fell by the most in that sector were all plug-in hybrids, namely the MG HS, Citroën C5 Aircross and Cupra Formentor, with the former dropping by 11.5% at the three-year point (7% at younger ages), equivalent to over £1,600.

Derren Martin, director of valuations at Cap HPI, said it was important to remember the context behind the recent falls in used car values

The data shows a big drop in battery electric vehicle (BEV) values, which have dropped by over 40% in the last 12 months.

BEV values at three years old decreased by 2.3% (£525) in December. Some models such as the Hyundai Ioniq Electric, Nissan Leaf and Škoda Enyaq have maintained their values.

Petrol and diesel cars dropped by an average of 2.1% and 1.9%, respectively, with pure hybrids dropping by 2.2%.

Cap’s figures show that BEV demand in December struggled to keep up with the increasing supply in the market, which has been the trend throughout 2023. Sold data received shows a significant increase in the number of BEVs sold compared to previous years, with a nearly 100% increase compared to 2022 and a staggering 1500% increase compared to 2018.

However, there is a positive trend in the average days to sell for different fuel types during the last six months of 2023 in Cap HPI’s used retail advert database. EVs have been the fastest-selling fuel type, with an average days in stock of 39 days, compared to 45 days for petrol and 47 days for diesel vehicles.

Looking ahead, Cap says used car supply will continue to outweigh demand, at least in the short term.

Derren Martin added: “In the first quarter of 2023, values went up in each of the first three months, something we had not witnessed before. It is unlikely to be repeated in 2024, mainly because of the volume that will be present. However, we are forecasting far smaller drops than over the last three months and a relatively positive start to 2024. Live values continue to be the way forward, with monthly ones out of date if not before they are published, certainly soon after.”