Demand still strong for used cars
Used car values have continued to track steeply upwards. Cap hpi’s live trade values reported an overall increase of 3.1% at the three-year point during the month of July, equivalent to over £425 per car.
This rise follows the 4.8% increase during June and a 6.7% increase during May, meaning that on average, values have increased by a staggering £2,125 or 16.6% in the last four months.
This rises to just over £3,000 for one-year old cars over the same period.
Head of valuations at cap hpi, Derren Martin, said: “Despite a number of distractions for consumers over the last month, such as England’s progression to the final of Euro 2020; high numbers of people self-isolating; hot, sunny weather; and the school holidays, consumer demand has remained very healthy.”
These rises are now also starting to influence retail pricing.
Martin continued: “There has been a notable rise in retail advertised prices over the last few weeks, as evidenced within our retail data. In previous months, despite wholesale values increasing extraordinarily, retail prices did not keep track. Dealers had to pay high prices for cars but could not price them high enough to maintain margins. Now, many retailers have pushed prices up, margins have increased and dealers are upbeat. Volumes may be down in June, but profitability is up.”
Some electric cars have also seen price increases, with average values of three-year old and older vehicles rising at a faster pace than petrol and diesel. With long lead times on new cars, an increase in the acceptance of EV technology, and improved disposable income, strong demand is now showing through.
