Used car values continue to realign with 4.2% fall in November

November saw used trade values fall by 4.2%, equivalent to £775 at the three-year age point, according to experts at cap hpi.  

The news follows October’s fall of 4.2%, which means that average trade values have dropped by 8.4% or £1,625 in the last two months alone, as prices continue to realign considerably. However, average values remain around 15% above where they were at the start of 2021 for petrol and diesel vehicles, while electric vehicles, on average, are around 20% lower.

Commenting on the trends, Derren Martin, head of valuations at cap hpi, said: “It is not uncommon for values to drop in November, with movements of 3.1% in 2014, 2.6% in 2015 and 3.0% in 2020, although there have also been some stronger years when volumes were lower, particularly over the last two years. This year is, however, the largest drop going into December that we have on record. There is no escaping that a realignment, not a crash, is ongoing.”

The data and technology company adjusts values within its cap Live product. Values are based primarily on sold prices evidenced in the used market. Data is received from a large number of industry sources, from large and small physical and online auctions, fleet and leasing companies, finance houses, rental companies and manufacturers used car programmes. The data represents thousands of sales to thousands of franchise dealers, used car supermarkets and independents per day.

A team of editors and analysts review the wholesale market data and reference retail market data from a number of high-volume used car websites.

At the one-year age point, values dropped by a lower, 3.3%, in November, equivalent to around £1,000, whilst older vehicles held up better, with a 2.6% drop at the 10-year point. Indeed, cars valued below £5,000 have dropped by 2.4%, less than £90 on average.
 
SUVs fell by 4.9% or around £940 on average, with small and medium models being the worst affected, with a drop of 10% in two months.
 
Petrol and diesel values at three years have, on average dropped by similar amounts, although diesel has declined by slightly less. Electric vehicles have reduced by 3.3% or £750, and this is now the third consecutive month in a row that battery-powered cars have been the best performing fuel type, albeit in a falling market.

Derren Martin concluded: “Values will likely continue to drop in the run-up to Christmas. While retailers' appetite may increase slightly as they look to buy for an anticipated increase in consumer demand, this is unlikely to be in large quantities and not by enough to eat too much into the volumes that are present in the wholesale market. Since cap Live was introduced in 2012, December has experienced an average drop of just 1.3%, with the largest being -2.2% in 2014. With the current realignment ongoing, however, and consumer demand only likely to increase after Christmas, it would be no surprise for a downward movement in excess of these figures.”