Slow September Hits Supply

Prices have stabilised as the knock-on effect of a slow September for 69-plate cars and vans in the new sector ripples through into the used market restricting the supply of stock.

Cap HPI says values in Black Book Live dropped 0.6% at the three year/60,000 mile point last month, the same as a year ago but the smallest fall of any other October since it began.

The average price drop is £100 but there are variations according to the vehicle’s age profile. Franchised retailers pushed through more pre-reg stock this September and new figures released this week from the SMMT show that Audi did 537, Peugeot 138, Citroen 34 and Vauxhall 27 for example. Coupled with short-cycle stock from Q1, values of six-months and one-year-old vehicles have taken more of a knock than older stock, dropping by -0.9% and -0.8% respectively. In cash terms, these amount to around £250 for both with petrol values again taking the biggest hit against diesel.

Derren Martin, head of valuations UK at Cap HPI, said:

“It is good to see stability return to the used car market. However, some manufacturers have continued to push pre-registrations and other short-cycle channels which inevitably can have an effect on future residual values, if cars returning into the used car market are not remarketed responsibly.”

Short cycle channels effect residuals

Diesels are still holding their popularity on the used car forecourts and selling faster than petrols. This demand has also held up their trade values which dropped by -0.4% against 0.7 for petrol and especially so in the SUV market.

There was an even bigger variation in the upper-medium sector where average diesel car values remained level but petrol variants dropped by 1.1%, or £250 at three-years-old.
Conventional petrol cars even suffered against petrol hybrids which continue to perform well against them, both in demand and percentage of list achieved too. Petrol hybrids are becoming more mainstream now and not just seen as a way of limiting the tax liability for company car drivers.

Reversing a recent trend showing an uplift in values, EVs have come under pressure as more volume reaches the used market and the supply and demand continues to find its natural balancing point.

Some big-name EVs which have seen a drop in values include the VW e-Golf, BMW i3 and Nissan Leaf, this last car in particular impacted by rising volumes of two-year-old product which have a 30KWh battery, where supply has outstripped demand.

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