Sub-£10k used car market sees demand spike

The UK used car market has seen a spike in demand for vehicles priced under £10,000, according to exclusive analysis for AM from Cap HPI.

Further data shows the used car market has seen an increase in average values of 0.2% in the first two weeks of this month, a positive shift broadly in line with seasonal trends.

Historically, the market tends to experience an average increase of 0.3% from February to March.

The data suggests a strengthening from the current position, aiming to finish closer to last year's movement of 0.7% for vehicles with three years and 60,000 miles.

The fact that the sub-£10k market is booming shows that both retailers and consumers are looking for good value for money.

The wholesale market remains positive, with resilient conversion rates and strong buyer engagement.

Chris Plumb, head of current car valuation at Cap HPI, said: "Feedback for the first half of February has been relatively positive, though performance varies among dealerships. 

"Buyers continue to face challenges in sourcing quality stock for vehicles aged between three to five years at sensible prices.

"Overall, recent trends indicate a stable environment for both retailers and wholesalers. 

“Despite seasonal variations and external economic factors, the market remains resilient, supported by improving conversion rates, healthy engagement levels and supply constraints.”

January saw mixed dealer performance, with ratings generally described as ‘good’ or ‘better than average,’ although results vary.

However, conversion rates are improving, which is a positive sign for wholesalers.

Plumb added: "The outlook remains positive, with signs of increased market activity and optimism for the year's first quarter. Retailers and wholesalers expect a steady start to the year, with healthy competition for stock, despite a limited return of used vehicles."