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Strong used prices may take a hit from Q4 de-fleet activity

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Average used car prices remain strong but quarter four de-fleet activity might put pressure on values.

Cap HPI reported that used car prices fell by -0.5% in July for vehicles at three years and 60,000 miles, against an average seasonal decline of -1.4% since 2013.

The strong market is attributed to demand driven by dealers that are increasingly turning to the used sector to bolster margins. 

But James Dower, senior editor of Black Book at Cap HPI warned there is a potential for some significant increases in de-fleet activity through Quarter four of the year that may put pressure on values.

The data company says that diesel values have fallen at a greater rate when compared to petrol in 2017, but values hardened in July. 

Dower said: “While diesel values continued to slip in July the trend was far less pronounced and average diesel movement at three years 60,000 miles was -0.8%. When compared to the same point last year which saw a -1.7% erosion there is no doubt that this is a significantly stronger performance.”   

Behind the averages performance is sector specific with smaller cars seeing diesel derivatives erode at a higher than average rate with City Car diesel movement at three years 60,000 miles downward by -1.2% and Supermini down by -1%

The average petrol movement into August saw a reduction of only -0.1% at three years 60,000 miles and, compared to the decline of -1.6% at the same point last year continues to reflect the increased consumer appetite of petrol models.

Petrol hybrid vehicles saw average prices at three years 60,000 miles increase by 0.1%, and this is the second month in a row that the average prices have risen.

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