Gradual Decline in Used Car Values Continues Through August

In the world of car dealer news and motor trade news, a dip of two per cent in used car values this August has marked the trickiest period in thirteen years. However, fear not, as the motoring realm remains resilient against a full-fledged price crash.

Derren Martin, the authoritative voice from Cap HPI’s valuations team, shared an exclusive insight with Car Dealer Magazine (find the full story at cardealermagazine.co.uk). According to Martin, the motor trade has encountered its fifth consecutive month of value depreciation this year. This, though not ideal, does not signal a price crash.

Martin aptly portrayed the current situation as "deflation in the used car market." While this month's decline of two per cent echoes July's 1.9 per cent drop, it's important to note that the process is more akin to a slow dance than a reckless tumble.

It's been a while since August witnessed such a sizeable plunge – in fact, the last time a similar occurrence unfolded was back in 2010. Notably, prior to the pandemic, August usually saw a mere 0.6 per cent decrease in used car values. Going even further back, the last time we witnessed a comparable move was in 2012, just before the inception of Cap Live daily movement records.

However, let's not despair. Martin swiftly reminds us that "values are still high and are on average 25 per cent more than they were three years ago." The current slide, though somewhat disheartening, is relative in the grand automotive tapestry.

As for the reasons behind this slump, Martin points out that August has been a tad more challenging than dealers might have expected. The summer slowdown – with folks away on holiday – has contributed to a lull in demand. Margins are feeling the pinch, and premium cars are experiencing a mild retreat.

Martin’s insight is nuanced – he notes, "With fixed mortgages coming to an end and higher interest rates, I think people are being more wary of cars being more expensive." The times they are a-changin', but not without reason.

In the midst of all this, the wholesale market is keeping its spirits high with decent conversation rates. There’s a specific hankering for those "Cap Clean" cars in pristine condition. However, excessive stockpiling isn't on anyone's agenda, showing a level-headed approach.

A notable subplot lies in the realm of electric vehicles (EVs). Their prices as a whole have dropped by 1.7 per cent – a modest slide compared to petrol and diesel counterparts, which experienced a 2.1 per cent dip.

Martin reveals intriguing dynamics: some EV models like the Vauxhall Mokka-e, Peugeot e-208, and Fiat 500e remain steady, while others like the Kia e-Niro and e-2008 are on the rise. Yet, there are bargains to be found, with some EVs priced lower than their internal combustion engine equivalents.

The road ahead, according to Martin, is not paved with doom and gloom. While values are likely to decrease slightly in the coming months, it won't be a catastrophic crash. Instead, think of it as a gentle realignment of values, keeping the motor trade world spinning.

As reported by cardealermagazine.co.uk, this insight from Derren Martin adds a nuanced layer to the ongoing saga of used car values, bringing reassurance to dealers and enthusiasts alike.

source http://autoengage.co.uk/home-page-6165/b/gradual-decline-in-used-car-values-continues-through-august