Used Car Prices Have Surprise September Bounce
Motor traders were handed an unexpected bonus this month. Despite the gloom in the rest of the economy they will have seen the value of their stock rise.
September is the first occasion this year that used car prices have increased. Trade values nudged up by 0.3% against expectations. Director of valuations at motor trade experts Cap HPI, Derren Martin described the news as ‘surprising’ as prices have been in reverse or flat during 2022.
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September 2022’s upward movement works out just shy of £50. However, it remains a positive outcome. Demand in the motor trade market has remained relatively buoyant whilst other sectors of the UK have experienced starker struggles.
Low supply in the market is the likely to be the reason for Last month bucking this year’s trend. Cap HPI believe dealers “are buying but not overstocking” and therefore avoiding an imbalance between supply and demand. Potentially dealers are concerned that the cost of living crisis could see a steep drop off in both potential buyer numbers and average spend.
Martin would support their cautious approach, ‘I would say dealers need to be wary as values will drop at some point this year – it might not be October but it will come and it won’t be a crash.’
The last used car value rise occurred in October 2021 with a 1.2% improvement. The year on year contrast is more profound with a 5.6% jump having taken place in September 2021. That month contributed to a total increase in used car values of 30% throughout 2021. Subsequently for most of this year market prices can best be described as stable.
Dealers would no doubt prefer the market to be experiencing a boom similar to that of 2021. Yet, when they survey the turmoil in other industries there might be some comfort to be had in such a robust and steady level of performance for the trade.
