Used car values up an extraordinary 13.5% in latest 3-month analysis
Live valuations data from cap hpi reflects a continuation in June of the extraordinary surge in used car values.
July 1st, 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 used car values continue their unparalleled shift upwards.
cap hpi’s daily Live trade values reported an overall increase of 4.8% at the three-year point during the month of June, equivalent to over £625 per car. This rise follows the 2% increase during April and 6.7% increase in May, signifying that on average, values have increased by a staggering £1,700 or 13.5% in the last three months. This rises to £2,500 for one-year old cars over the same period.
“Consumer demand has remained very strong in June, despite half-term, great weather, and Euro 2020 to distract people. With stock-turn high, this has led to retailers requiring a constant supply of cars to replenish their forecourts,” said Derren Martin, Head of Valuations at cap hpi. “Well-documented new car supply issues resulting from several component shortages, have led to fewer fleet returns and part exchanges. This has caused demand to outweigh supply for the third month running.”
As cap hpi reported last month, the current rise in used car values in the trade arena have not done so to the same degree in the retail sector. This makes it difficult for the trade to buy cars working back from retail advertised prices.
Whilst retail values have only increased slightly on average, some dealers continue to follow the traditional approach of reducing prices once a car has not sold after a certain number of days. They then find it difficult to replace the car from auctions or direct remarketers at similar prices.
Every sector and fuel-type has seen values increase in May. Examples of some volume models from across various sectors that have increased in value at the 3-year, 60,000-mile point are Ford Fiesta (+6% or £500), BMW 1-Series Diesel (+7% or £850), Hyundai Tucson (+10% or £1,150) and Vauxhall Zafira (+9% or £750). It is important to note that these increases are in addition to even heavier increases last month, meaning many mainstream brands have increased in value by thousands of pounds in just a few weeks.
Martin concluded that even if demand dips from its current levels, supply is still going to be lower than normal for some time yet. “With new cars being in such short supply and likely to continue to be so for at least the next quarter, there is no bow wave of fleet returns coming through. One million less cars have been registered than would reasonably have been forecast over the last 18 months. These cars are lost to the used car market. It will be a while before supply outweighs demand again.”
With the market moving so quickly, cap hpi’s traditional monthly values are out of date almost as soon as they are published because values are now changing daily. cap hpi’s research shows values are currently changing daily and it is encouraging the industry to adopt daily Live trade values to keep in touch with the rapidly evolving market and not be caught out when values change but prices don’t.
Let's keep in touch.
Thanks for signing up.
Join our mailing list to keep up to date on the latest news, reviews and insights.