Used car prices were firmer across most sectors between September and November than the previous 3 months, according to the used car pricing experts, CAP. The CAP Used Car Price Index also reveals an increase in values for 4x4s over the period while convertibles are hitting the doldrums.
A reduction in the number of used cars available overall, at the benchmark 3 year old point, is helping to keep prices relatively stable in most cases. This stems from the credit crunch and recession of 2008 which saw a dramatic reduction in the number of new cars produced and registered.
This low volume of available stock is helping to compensate for muted retail demand, due to consumer caution.
Superminis are benefitting from the relatively stronger demand for running cost economy and fell, on average, by just 1.9% between September and November. Lower medium – or small family – cars are also enjoying similar demand, falling in value by an average of just 2.6% over the same period.
Also worthy of note are upper medium – large family – cars, which have historically often been especially vulnerable to oversupply and consequent heavy depreciation. These vehicles saw an average reduction of just 2.3%.
The weakest performers over the past 3 months have been convertibles, which are notoriously vulnerable to seasonal fluctuations in demand, which are down by an average 9.6%.
Returning to favour, following a period of significant reductions over the summer months, are 4x4s with an average increase of 3.2%.
Mike Hind of CAP said: “Although there remains precious little economic good news and consumers remain nervous about making big ticket spending commitments, the positive message is that more stable used car values means slower depreciation for owners. With headlines so often focused on fuel and insurance costs it is easy to forget that depreciation is the number 1 expense most car owners have to live with.
“Thanks to low volumes of cars available, even the usual suspects for heavy depreciation, such as large family cars and popular executive models, have been seeing relatively strong value retention as we head toward the end of the year.
“Indeed, many used car values moving into November have been unusually strong at a time when historically prices have tended to be much weaker.”