Used car market stability set to continue, says Cap HPI

The UK’s used car market is stable with only a slight decline in January so far and Cap HPI is seeing signs of strength in the market that should come to fruition in the coming weeks.

Cap HPI’s exclusive analysis for AM shows that there has only been a modest 0.1% decline in average values for the month-to-date, which aligns closely with historical trends. 

Typically, the market experiences an average decline of 0.2% from January to February.

This year’s performance suggests a relatively stable market. As the month progresses, there are encouraging signs that it is strengthening. 

Interestingly, last year recorded a similarly negligible decline of -0.1% during February, highlighting a continued pattern of minimal disruption at this time of year.

The anticipated improvement by the end of the month reinforces the market’s steadiness and resilience against broader economic challenges.

Chris Plumb, head of current car valuation at Cap HPI, said: “The current trends in the used car market reflect a stable and moderately positive environment for both retailers and wholesalers.

“Despite seasonal fluctuations and external economic pressures, the market has demonstrated resilience, buoyed by factors such as improving conversion rates and strengthening performance against Cap HPI values.”

Mixed dealer performance in January 

January is seeing mixed dealer performance, with ratings described as ‘good’ or ‘better than average,’ although variability remains significant.

Conversion rates are improving daily, which is an encouraging sign for wholesalers. Additionally, performance against cap hpi values in wholesale channels has steadily improved, further contributing to overall market confidence.

Plumb concluded: “The overall sentiment remains positive, supported by strengthening market activity and optimism for the first quarter of the year.

“Retailers and wholesalers anticipate a normal positive start to the new year, maintaining healthy competition for stock amidst limited returns of used vehicles.

“The used car market continues to exhibit resilience, and the data points to a small positive movement in values by the end of the month.”