DESPITE a strong start to the year with demand from car dealers keeping wholesale values of used cars above the usual seasonal levels, the market is now showing signs of weakness.
cap hpi is keeping a very close, daily, eye on retail footfall, auction attendance and prices in the trade and retail data.
Currently, values in Live are down 1.5% since last month on average, but there has been a marked change in the market since the beginning of last week.
There is the likelihood that demand will continue to decline, and with it, values in the short term. Our forecasting team is currently predicting values to drop by more than the seasonal norm over the coming weeks.
Short-term forecasts for the coming months will be worse than otherwise would have been the case, as the effects of COVID-19 continue to be felt.
At present, cap hpi’s longer-term forecasts for one to five years in the future are likely to remain broadly unchanged, as it waits to see longer-term impacts on new car registrations, especially following plant closures from many manufacturers.
A fall in registrations this year could help support used values in the long term, and there are also a great many other factors which could yet influence values in various directions.
Derren Martin, head of valuations, said: “The automotive industry is navigating uncharted waters, and the coming months will provide an unprecedented challenge as the UK has to adapt to new ways of working, socialising and shopping.
“To keep customers informed on a fast-moving market cap hpi is reviewing daily data feeds that are received from trade and retail sources, and the changes reflected accordingly.
“Our Business Continuity Plan has been enacted, and our valuation services will continue to function as normal.
“As a call to action, I would encourage all customers to use the data and tools at their disposal. The market is changing daily, and situations such as this are the reason cap Live was developed.”
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