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Second Hand Prices To Stabilise With Diesel Holding Strong

Prices in the used sector are going through a period of correction after petrol was boosted to a peak last summer but the market should stabilise going ahead and diesel becomes relatively more attractive, an analyst has said.

Andrew Mee, head of forecast at cap HPI, said prices have been “volatile” for the past couple of years with petrol values being boosted since early 2017.

“In mid-2018 used petrol values were very strong and up about 5 or 6% for a car of the same age/mileage profile of a year before. This followed the anti-diesel sentiment which began in early 2017 and then a shortage of supply around WLTP last autumn.

“However, over the past nine months or so petrol values have fallen more than diesel and what we have been seeing is a market correction. There may be a slight drop overall in the next six months because there often is in the second half of a year but our forecast is that prices for both fuel types will stabilise from now.

“We think the fall from last year’s peak has pretty much run its course and we are not far off the point where prices will stabilise for both petrol and diesel. We probably won’t see the fluctuations up or down we’ve had over the past 18 months.”

Diesel vehicles will hold their value and appeal

Andrew also said that second-hand diesel vehicles may, in fact, gain more momentum and that bigger MPVs should also get a boost.

“Looking ahead, we think diesels will be strong in holding their value and appeal. We are probably about a year away from diesel supply being significantly hit by the switch in the new market but buyers in the used market will always want their fuel economy benefits and so we don’t see diesel values falling off a cliff.

“Looking at the various sectors, we also see MPVs finding favour because there are not many new seven seaters being built apart from big and expensive SUVs. We are already seeing MPVs like the Ford Galaxy or SEAT Alhambra do well as family vehicles and as supply slows so their values will hold up well.”

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