Used Car Values Gave Strong Performance in October

Automakers are battling to boost new car sales volumes; however, the used car market is still overshadowing the new. During October 2018, used car values gave a strong performance, which has given independent car dealers confidence for the remaining two months.

For many years, used car values have dropped by around 1.6 per cent nearer to the last few months of the year, but this October, values have dropped by just 0.6 per cent, indicating a strong market.

Cap HPI’s New Data

The latest data from Cap HPI reveals a strong performance for used car values during October, with values dropping only slightly. Experts at Cap HPI confirmed that this marks the strongest October recorded in nine years, including 2009, when the market was recovering from recession.

During the last five years, the typical movement in Black Book live throughout October was 1.6 per cent, while it was as low as 2.2 per cent, back in 2015.

Head of Current Valuations at Cap HPI, Derren Martin, said: ‘’When viewing October’s performance in the context that used car prices have been strong all year, these are unprecedented times for used car values.”

What This Means for the Remainder of the Year

‘’The last two months of the year are generally challenging from a demand point of view, and values can often slide away before recovering somewhat in January.’’

In the remaining two months over the previous five years, Cap HPI experts said that values dropped by roughly 2 per cent each month.

Automakers should expect a decrease in new car volumes well into 2019 due to WLTP, while it is also unlikely that the number of part-exchanges and fleet returns will largely increase during the rest of 2018.

‘’Taking these demand and supply dynamics into account, it is fair to assume that values will likely reduce but not to the extent that they have done in previous years.’’

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