Latest data by cap hpi show used car values are increasing as the end to Lockdown is in sight
Live valuations data from cap hpi reveal a feel good factor is already proving a fillip for dealers ahead of the proposed lifting of Lockdown measure
The latest data shows that after 5-months of used cars dropping in value, they are on the turn in the run up to car showrooms reopening in April.
March 31, 2021, LONDON – cap hpi, part of Solera Holdings, Inc., a global leader in risk and asset management data and software solutions for the insurance and automotive industries, confirms that a corner has been turned in the run up to April 5th in Scotland and 12th in England.
cap hpi’s Live values reported an overall increase of 0.1% at the 3-year point during March. Whilst this increase is small, this is significant because it comes off the back of average drops of almost 2% for each of the last 5-months.
And the valuations experts at the business predict that April and May will witness wholesale prices increasing as dealers seek to satisfy this consumer demand, particularly with some uncertainty over supply levels in the new car market.
Head of Valuations at cap hpi, Derren Martin commented: “Initially as we entered March, values continued to drop in the same way they had over previous months. Over the last 2-3 weeks, however, the market has turned. Dealerships have been taking employees off furlough and they have been more actively stocking up to cope with increased consumer demand, both now and when car showrooms reopen in early-to-mid-April. More so than ever, though, the devil is in the detail as prices have varied for different sectors of the market.”
cap hpi’s Live data shows MPVs continue to drop in value and are mainly affected by showrooms being unable to open physically. They have proved less popular online, but may be viewed more pragmatically in the flesh once dealerships re-open.
The lack of consumers physical browsing has certainly had an effect. With national travel restrictions easing and staycations likely to be on the agenda due to uncertainty of foreign holidays, there may well be an increase in popularity for this sector over the coming months.
Alternatively-fuelled vehicles have generally reduced in value once more. Electric vehicles dropped on average by 1.4%, equivalent to almost £400 at 3-years old, with plug-in and pure hybrids very similarly affected. Supply continues to outstrip demand and these cars still look expensive compared to internal combustion engine cars. There have also been strong consumer offers on new electric cars and volumes of pre-registered and ex-dealer demos off the back of tactical new car activity in the final quarter of last year. However, as reported previously, cap hpi does not believe the UK Government’s shock decision to lower the value of the plug-in car grant incentive will have a large impact on used car values.
The polar opposite to EV performance is witnessed at the aspirational end of the market. Prices of convertibles are rising, almost across the board, at levels rarely witnessed before. Older cars, where there is lower volume, have been the strongest. Even where there is volume, such as the Mercedes E-Class and the BMW 2-Series. Increases of upwards of 12% (£1,750 and £1,500 respectively) are rises generally not experienced in a single month.
This is even more remarkable considering many convertibles went up in value last year and have not dropped by the usual amounts over the winter.
Martin expects the used car market to continue to be strong “We are not expecting pent-up demand to be quite at the levels they were following Lockdown 1 last year, but there will still be plenty of buyers actively seeking out a used car.”
Keeping close to cap hpi Live valuations, to maximise profitability, based on sold data as evidence, is more important than ever in such unusual and potentially volatile times.
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