January Used Car Market Sees Significant Improvement, Cap HPI Reports
The used car market in January saw a significant improvement compared to December, according to a report by Cap HPI. Demand increased as the month progressed, with values at the three-year, 60,000-mile benchmark showing only a minimal decline of 0.1%. This translates to an average decrease of £60, making it the joint fourth strongest movement on record for January since 2012.
Jeremy Yea, senior valuations editor at Cap HPI, noted that the market could have seen a slight positive if the monthly deadline had been a few days later. He also debunked the myth that used car values go up in January, stating that since 2012, the average monthly movement during this period has been a negligible -0.2%.
The analysis also revealed that values at the one-year mark saw a drop of 0.3%, equating to about £150. This decrease in values for younger cars is likely due to appealing new car offers and discounts on pre-registered models. On the other hand, older cars at the five- and 10-year age points registered increases of 0.4% and 1.6%, respectively.
Across different powertrain types, diesel emerged as the strongest performer with a 0.2% increase, while hybrids remained flat. Petrol saw a marginal decline of 0.1%, and plug-in hybrids dropped by 0.6%. Battery electric vehicles (BEVs) experienced the biggest decline, falling by 1.1%.
Looking ahead, Yea predicted that the trend for BEVs is likely to rebound in February, as they have been the fastest-selling fuel type for many retailers. He concluded that February will likely continue on a positive trajectory, with demand increasing as stock becomes scarcer closer to March.
In contrast, Marketcheck UK reported a stark drop in used car sales in November and December, down 23% compared to September and October. Alastair Campbell from Marketcheck UK suggested that this downturn may stem from broader economic impacts, affecting consumer confidence and spending power.
On a brighter note, SUVs were crowned as the fastest-selling used cars of 2024, with seven of the top 10 models being SUVs. The Toyota C-HR emerged as the champion, followed by the Mercedes GLA, Kia Niro, and Volvo XC40. The Ford Fiesta retained its spot as the most popular vehicle on AA Cars, extending its nine-year reign as Britain’s most searched-for vehicle.
Overall, the used car market in January showed positive signs of improvement, with SUVs leading the way in terms of sales and popularity. As we move into February, the trend is expected to continue on a positive trajectory, with demand increasing as stock becomes scarcer. It will be interesting to see how the market evolves in the coming months.