Strong demand supported the strongest October for used values on record, according to Cap HPI.
While October was not immune to deflation, the average drop across all sectors was just 0.6%. It marks the strongest October Cap HPI has recorded, including 2009, when recovery from recession was underway.
Over the past five years, the average movement in Black Book live during October was -1.6% and it has been as low as -2.2%, in 2015.
Derren Martin, head of current valuations at Cap HPI, 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.
“Of particular note at the current time is the difference between diesel and petrol deflation. This last month saw petrol cars reduce by an average of 1.0% whereas diesels have dropped by just 0.3%. Used diesel cars generally remain in demand, with consumers seeing the benefits of the economy and torque.”
The petrol/diesel comparison is well illustrated in the SUV sector. Petrol SUVs dropped by 0.6%, diesels by 0.3%, with buyers comparing prices for both fuel-types and choosing the best value for money.
Some electric models, the Renault Zoe and Peugeot iOn, saw notable demand and supply levels were reasonable, so values went up by around 4% in Black Book live. However, the strength was not replicated across all electric vehicles.
Some MPVs also rose in value. Volumes have reduced in this sector due to the meteoric rise of SUVs, but some quality cars still serve a purpose for consumers. The Seat Alhambra, Vauxhall Zafira Tourer and certain variants of the Ford Galaxy all performed particularly well in October.
Martin concluded: “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. Over the last five-years in November and December values dropped by an average of almost 2% per month.
“With some manufacturer’s new car volumes likely to still be reduced well into the New Year, due to WLTP, it is unlikely that volumes of part-exchanges and fleet returns are going to increase significantly during the balance 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.”
© Motor Contracts Ltd 2019