Average used car values have dropped by 0.9% so far in June, according to AM’s latest exclusive mid-month update from Cap HPI, as reported in their Cap Live daily product.
Derren Martin, Cap HPI director of valuations, said the business has seen a return to seasonal normality over the last couple of months, with June offering no real shocks so far.
He told AM: “If things carry on as they are in June we are predicting a 1.3-1.5% drop for the month. It’s a normal drop for this time of year and it’s nothing untoward.
“We’re still way ahead of where the market was three years ago on used values due to the strong increases we’ve had.”
The used market for June in 2022 also dropped by 0.9%, the two years previous to that saw unusual increases with values rocketing up, but values dropped by 2.1% in 2019, by 0.6% in June 2018 and by 1.4% in 2017.
Martin said: “It’s steady away really, the used car market is still short of volume compared to pre-COVID times and that’s keeping the market relatively strong and will continue to do so.”
Used car supply is recovering with a 23% increase compared to 2022, but these levels are still 7% below where things were pre-Covid in 2019.
This increase in stock has been driven by a recovering new car market, which has helped to generate a higher level of part-exchange stock.
Martin’s tipoff for market segments in June so far shows that city cars may have peaked and are now seeing a realignment in values, they are currently down 2.4% month-to-date. However, this is the result of them seeing some of the strongest values over the last year.
Hybrids and plug-in hybrids have also dropped by 1.5% and 1.1% respectively so far in June.
Martin said: “Some of the hybrids do look a little bit expensive now the prices on EVs have dropped, so there could be a little bit more pressure to come on that segment.”
Used EVs market starts to stabilise
Used electric vehicle (EV) values have started to stabilise, recording a 0.9% fall in June so far, compared with the 4.1% drop last month.
Martin said that while EVs aren’t under performing across the total market, there has been a real mix of performance within the segment.
According to Cap Live data as of June 13, the Audi e-tron GT has dropped by 3%, the Cupra Born has dropped 4% and the Honda e has dropped by 6%.
But on the flip side, the Hyundai Ioniq 6 (pictured) is up 2%, late plate Tesla Model 3s are up 5% and Model X and S are up 2 and 3% respectively.
Martin said: “Everything is realigning in the used EV space.
“Values have dropped by so much that we’re now seeing a natural realignment.
“The Model 3 is a bit of a benchmark vehicle. There are EVs that were way below a Model 3 in their used price, but now they’re above.
“Those Teslas are now looking like good value for money and so retailers are buying them.
“Whereas some of those other EV models I’ve mentioned, we might see more of a realignment to come.”