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Derren Martin
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STRONG demand and a shortage of supply helped to drive up used values in July by 0.4% according to data experts at cap hpi.

The small increase in used values, at the three-year and 60,000-mile point, in July was the first upward movement in the month since 2009 and followed an even stronger June.

Average values at the one-year point stayed level and vehicles younger than this dropped very slightly. At all other ages, there has been a small, positive movement.

Since car showrooms reopened on 1st June the retail market has been buoyant and July continued where June left off, with little sign of a slowdown. There remains some pent-up demand in the market, plus those consumers wary of public transport, both are keeping demand healthy.

Derren Martin, head of valuations UK at cap hpi said: “We have witnessed a relatively dramatic increase during June, then a stabilisation in July and it would appear that values have peaked but are remaining at or around that level for now.

“As always, there are winners and losers within these averages.”

Some Electric Vehicles (EVs) and hybrids have struggled. Through lockdown there was some debate about the potential increase in demand for alternatively-fuelled vehicles as cleaner air became noticeable around our larger cities, due to a reduction of vehicles on the roads.

However, in the short term, this has not been the case due to them still looking expensive versus internal combustion engine cars.

Despite their green credentials and running cost savings, feedback from the market has been that consumers currently find the premiums too expensive over a petrol or diesel vehicle,  plus there are concerns over range still.

SUVs now sit at 27% of the used volumes up from 20% just two years ago, most of this being at the expense of upper-medium (D-sector) and MPVs.

Supply is high but so is demand and some notable upwards movement in prices has been reflected for the Audi Q2, BMW X1 and Land Rover Evoque, amongst others. Where demand has not been so strong, values have dropped for models such as the Citroen C5 Aircross, Hyundai Kona and Kia Niro.

Martin said: “Convertibles have certainly been in demand over the last few weeks.  In more normal times, trade values would have peaked in late-May or June and would now be heading south.

“During July, values have increased by 2.4%. The reasons for this can be put down to some pent-up demand, good weather, no excess supply and the previously mentioned dynamic of some consumers saving some money during lockdown, and now looking to buy a desirable or even an extra car as a toy.”

Older more affordable convertibles have increased in price the most in percentage terms, models such as the Audi A4 Convertible, the petrol variant of which has increased by a phenomenal 32% or £825 (at 10-years old) and the Audi TT Roadster, up 11% or £1,000 at five-years-old.

Martin said: “Last month we predicted that July would be stable with no reason to expect a drop in values, but the large increases experienced in June were unlikely to continue.

“That is precisely what has happened. While there could be some very early signs of softening prices in August, we do forecast a relatively steady month, with possible drops to come from September onwards.

“When or if it comes, it is likely to be more acute for younger, higher value mainstream and premium cars.”

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