Fall in Q4 used car values may ‘start sooner and last longer’

CAP is predicting a decline in used car values in the final quarter of 2015.

It said the fall would be similar to that experienced in Q4 2014, but it could start earlier and last longer.

Derren Martin, senior editor, CAP Black Book, said: “September will undoubtedly see large numbers of retail part-exchanges and fleet returns.

“Early September may well stay relatively steady with regards to value movements, with particular pressure not appearing until the additional volumes start to appear.

“With used car volumes being high, and on the increase, and reductions in values so far this year being relatively modest, we are faced with a similar picture to that of last year.

“In the final three months of 2014, there was a pricing realignment in the used car market and there is every likelihood that this could happen again, although this time around there is the potential for it to start earlier and still last for the remainder of the calendar year,” he said.

Used car supply levels were high in August, but demand closely matched them. Values in Black Book Live declined slightly, with average values down a modest 0.6% at the three-year/60,000-mile point.

Since the spring, average used car values have declined in all key age brackets, according to the monthly data from the National Association of Motor Auctions. However, values remain higher than 2014’s results.