Largest monthly drop in used car values in over a decade

author: FutureCar Staff    

The average value of used cars at three years and 60,000 miles dropped by 4.2% in October, amounting to £850, according to Cap HPI. This decline is the largest in a single month since Cap Live was introduced in 2012 and the biggest fall since May 2011. Derren Martin, the director of valuations at Cap HPI, described October as a challenging month and highlighted the significant reduction in value. Over the past decade, there have only been three instances of monthly drops in Live values exceeding 3%, making this the largest October fall ever recorded.

Martin emphasized that this drop represents a considerable realignment, as values have now decreased by a cumulative 13.6% in just seven months since April. He stated that October has been a groundbreaking month for used value drops, with substantial reductions compared to previous years of stability or upward movements. However, Martin clarified that despite the market shift, prices for petrol and diesel vehicles are still approximately 20% higher than at the beginning of 2021, indicating a realignment rather than a crash.

In October, values for one-year-old cars decreased by an average of 3.6%, equivalent to roughly £1,225. This decline was influenced by an increase in late-plate cars and some pre-registration activity. At older ages, values dropped by 4.3% for five-year-old cars and 4.5% for ten-year-old cars, amounting to £550 and £240, respectively. Among different fuel types, petrol cars experienced an average drop of 4.6%, followed by diesel cars at 4%, hybrids at 4.1%, and plug-in hybrids at 3.9%.

Electric vehicles (EVs) continued to outperform other fuel types for the second consecutive month, with an average drop of 2.4% or around £650 in October. Remarketers reported strong demand from retailers for EVs, but businesses are still prioritizing replacement rather than stocking up. The Renault Zoe and Nissan Leaf were the top-performing models, seeing an increase of approximately 2% at three years old due to their attractive retail price points.

Convertible and coupe cabriolet cars were the worst affected, experiencing drops of 5.4% and 7%, respectively, at three years old. This equates to an average decrease of over £1,300 for both types. While seasonal movement is typical for these niche sectors, concerns about the cost of living and rising insurance premiums have exacerbated the downward trend.

SUVs, the largest sector in terms of volume, also experienced a significant drop, with values decreasing by an average of 5% in October, equivalent to over £1,000. Martin stated that all value changes are based on extensive trade data and heavily reference retail advertised data. He expects the supply in the market to continue increasing as manufacturers' supply constraints ease and they strive to gain market share and meet environmental targets.

Martin anticipates that values will continue to decline in the coming weeks. He emphasized the importance of embracing live, daily values in such turbulent times, as monthly values can quickly become outdated. He noted that since the introduction of Cap Live in 2012, there have been two instances of drops exceeding 3% in November, and it would not be surprising if it happens again this year.

For more information on market expectations for the used and new car market from Cox Automotive, click here.

FutureCar Staff