Signs of strength in January used car market, says Cap HPI

The UK’s used car market has seen the joint fourth strongest performance on record, according to the latest data from Cap HPI.

Values at the three-year, 60,000-mile benchmark show a minimal decline of just 0.1%, translating to an average decrease of just £60.

Jeremy Yea, senior valuations editor at Cap HPI, said: “Had the monthly deadline been a few days later, it is quite possible that this monthly change could have been flat or even a slight positive.

“Cap Live subscribers may see this in the figures in the coming days and may have already noticed it in the brief period between the drafting of this overview and the start of February.”

Yea said it’s a bit of a myth that values increase in January, as since the introduction of CAP Live in 2012, the average monthly movement for this period is a negligible -0.2%.

Only three years since 2012 have resulted in positive February monthly movements - 2012 (0.5%), 2020 (0.6%) and 2023 (0.1%) - with the weakest being a drop of 0.7% back in 2019.

At the one-year mark, values declined, slightly surpassing the three-year benchmark with a drop of 0.3%, equating to about £150.

This decrease in values for younger cars can likely be attributed to appealing new car offers and considerable discounts on pre-registered models.

Condition for older cars is key

The five-year and 10-year age points experienced increases of 0.4% (or £10) and 1.6% (around £60), respectively.

Yea said the condition of these older cars has been key.

He said: “If the grading and mechanical assessments have been positive, it’s likely that the average movements have significantly exceeded the most desirable and well-maintained examples sold this month.”

At the three-year mark, diesel emerged as the strongest performer this month, with a 0.2% increase, or around £40, while hybrids remained flat overall.

Petrol saw a marginal decline of 0.1%, or approximately £60, and plugin hybrids dropped by 0.6%, or around £175.

Electric vehicles experienced the biggest decline this month, falling by 1.1%, or roughly £240.

Yea concluded: “Battery electric vehicles (BEV) at the three-year benchmark have experienced a little more pressure throughout January following several months of stability.

"However, this trend is likely to rebound throughout February due to being the fastest-selling fuel type for many retailers.

“January ended broadly in line with our short-term forecast position and overall expectation. It has been a good solid month for most retailers, auctions and wholesale vendors, but with some adverse weather perhaps affecting a more positive outcome. February will likely continue on a positive trajectory, with demand increasing as stock becomes thinner on the ground the closer we get to March.”