As we move through October 2024, the UK used car market has held its ground, even as values experienced a modest dip. The latest data from Cap HPI shows that used car prices have fallen by only 0.5% in the first part of October, with projections indicating a total decrease of about 1% by the end of the month. In comparison, October 2023 saw a sharper fall of 4.2%, signalling a much more stable market this year.
Stable Demand Amid Supply Changes
One key factor keeping the market steady is the supply-demand balance. Despite an increase in vehicle availability since September, there remains a noticeable shortage of three to four-year-old cars. This has helped keep demand relatively stable, particularly as more fleet and part-exchange vehicles enter the market due to recent new car registrations.
Jeremy Yea from Cap HPI points out that while October’s influx of vehicles is creating some downward pressure on used car values, the effects are minor compared to the large declines observed last year. Many remarketers are approaching the current market cautiously, aiming to sustain price stability through prudent inventory management.
Electric Vehicles: Bright Spot with Mixed Outlook
The performance of electric vehicles (EVs) has been notably resilient. Cap HPI reports a slight uptick of 0.3% in values for three-year-old EV models like the Citroën C4 Electric, Nissan Leaf, Vauxhall Corsa Electric, and Peugeot 208 Electric. This trend underscores the increasing appeal of EVs in the used car market, driven in part by the easing cost-of-living pressures and relatively stable interest rates.
However, there are hints of potential challenges ahead for late-model EVs. New battery electric vehicles (BEVs) are being aggressively discounted, which could exert downward pressure on used EV values in the coming months. As these discounts filter down, used EV values, especially those of newer models, may decline further.
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Fuel Type Trends and Their Impact on Values
Beyond the general market stability, fuel types are showing varied performance. Diesel cars, for instance, have become unexpectedly popular in recent months. According to Cap HPI, the value of diesel cars has dropped less than that of petrol equivalents, partially due to fewer diesel vehicles available on the market. Diesel-powered vehicles remain a preferred option for buyers looking for longer-range models.
Meanwhile, petrol hybrids have also performed relatively well. They tend to hold their value better than pure petrol vehicles, thanks to their fuel efficiency and increasing acceptance among consumers concerned about both economy and emissions. As for pure petrol vehicles, their values have seen slightly sharper declines, especially among three-year-old models, which have experienced an average 1.1% drop.
Looking Ahead: A Cautiously Optimistic Forecast
As we approach the end of 2024, market analysts at Cap HPI are cautiously optimistic. Unlike last year, when a 10.5% drop occurred from October to December, this year appears steadier, with gradual declines rather than abrupt falls. Stable interest rates and a healthier economic outlook could contribute to a more balanced used car market.
However, some volatility remains. The used car market often experiences price fluctuations during the year-end, and with the impact of recent vehicle supply dynamics, it’s still crucial for remarketers to track trends and adjust their strategies accordingly. For instance, while the rise in EV values is encouraging, the potential for late-model depreciation should be monitored closely, particularly with new BEV discounts potentially creating competitive pressure on their used counterparts.
Conclusion
The October 2024 used car market reflects resilience in the face of mild value drops, and it is clear that careful market strategies are helping to sustain price stability. For motor traders, understanding current trends—such as the steady demand for three- to four-year-old vehicles and the continued demand for diesel and petrol hybrids—can help navigate this dynamic period.
For a deeper look into the latest used car market insights and trends, Cap HPI offers regular updates and forecasts.
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