July dip in used car values

Used car values fell by 1.9% in July despite healthy wholesale activity, according to data experts at cap hpi.

The fall of 1.9%, or £350 on average, is a larger drop than the average pre-Covid July figure of a drop of 1.2% although average used car prices remain almost 30% higher than they were two years ago.

At the one-year age point, values dropped by 1.6% or about £525 in July.

EVs returned to being the lowest-performing fuel type this month with an average fall of 2.8% or about £600. The cumulative movement for EVs over the last 11 months now amounts to 42.6%

Jeremy Yea, senior valuations editor at cap hpi, said: “We expect August to see more retail consumers prioritising their holidays over purchasing a new or used car, so buying activity could remain muted during the summer holiday period. While wider economic factors such as rising interest rates, fixed mortgage deals coming to an end, and pressure on household budgets will also likely play their part in further compounding buying activity.

“There will still be the necessary vehicle purchases that will need to be fulfilled by consumers. Taking in all the above factors and summer seasonality, we are likely to see some similar used car market deflation in August, with average downward market movements being applied.

“The used car market will also continue to see volatility for alternatively-fuelled vehicles, however, with hybrids under pressure due to price discrepancies versus EVs, and EVs themselves continuing to realign amongst themselves, seeking out more of a natural order after the last few tumultuous months. As always, keeping close to daily Cap Live values remains paramount for all fuel types as demand and supply dynamics play out differently for different models.”