Good demand helped slow used car value drop in May

Good trade demand for ex-fleet used cars during May, particularly for petrol cars, led to an average value drop of just 0.9% (£210) for a three year, 60,000 mile car, according to Cap HPI.

Petrol-engined cars reduced by just 0.4% or £135. Diesel continued to split further away from petrol for the fifth consecutive month and fell by -1.1% or c.£210.

In contrast, the average value of used battery electric vehicles at 3yr/60k continued to fall at the fastest pace, with May's 3.6% or £785 drop marking the 21st consecutive month of falls for pure electric cars.

The cumulative decrease in BEV values amounts to approximately 57%, compared to petrol decline of around -12% over the same period.

Plug-in hybrids (PHEV) fared better, with a 1.1% or £285 fall, and pure hybrid declined just 1.0% or £200.

Jeremy Yea, senior valuations editor at Cap HPI, said: “There is strong demand for retail-friendly vehicles in good condition and in the most desired fuel types.

"However, buyers have become more discerning in their choices, prioritising desirable and fast-selling stock over potentially depreciating assets that could pose financial risks.

“The market continues to perform in line with seasonal expectations, or even slightly better for some and wholesale activity has remained largely stable throughout the month. Trade data supply volumes have remained consistent and healthy, with mid-month supply tracking around 6% above the same period in 2023, and 10% down compared to pre-COVID 2019.”

At the one-year age point, values declined by -0.8% or c.£325, while at five years old values reduced by -1.3% or c.£160 and -2.4% or c.£100 at 10 years.

Examining the car segments, values of convertibles and coupe cabriolets had a seasonal rise of 0.9% or £80 and 2.5% or £400 respectively at the three-year age point.

Superminis (B-segment) and lower medium (C-segment) dropped very little, signalling the demand for mainstream fast-churning stock.