The average value of a used car at 3yrs/60k has fallen again in December, but Cap HPI said seasonal norms are returning.
The 2.1% fall in December follows larger drops in November and October and means these typical de-fleet used cars have lost almost £2,000 in value during the final quarter of 2023.
Derren Martin, Cap HPI’s director of valuations, said: “Although the drop does equate to a 10.5% or around £2,000 reduction in the last three months, it is 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, Citroen C5 Aircross and Cupra Formentor, with the former dropping by 11.5% at the 3-year age (7% at younger ages), equivalent to over £1,600.
On average, Battery Electric Vehicles (BEVs) have dropped by over 40% in the last 12 months. Throughout December, BEV values continued to decline as demand 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.
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. BEV values at three years old have decreased by -2.3% (£525) in December. Some models like the Hyundai Ioniq Electric, Nissan Leaf, and Skoda 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%.
Derren Martin concluded: “Looking into 2024, it is likely that supply will continue to outweigh demand, at least in the short term. 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.”
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- Source: https://www.am-online.com/news/market-insight/2023/12/22/another-21-fall-in-average-used-car-values-reported-by-cap-hpi
