August used car market 2024: dealer demand for EVs outpaces petrol reports cap hpi

THE used car market continued its unexpected resilience in August, defying seasonal norms and demonstrating a sustained period of stability, according to industry experts cap hpi.

Key highlights:

Steady values: Average used car values at the three-year age point fell by a mere 0.6% in August, outperforming the seasonal average decline of 0.7%.
EVs gaining traction: While still experiencing a decline in value, Electric Vehicles (EVs) showed increased desirability among dealers with improved auction conversion rates, indicating a growing acceptance in the market.
Robust demand: Retailers maintained healthy demand to replenish their stocks, especially for specific models, conditions, and price points, contributing to the stability in the market.

Market dynamics

Derren Martin, Director of Valuations at cap hpi (main picture), attributed the market’s stability to the price adjustments in the final quarter of last year, which brought used car values to a fair level for both retailers and consumers. This balance has persisted throughout 2024, with nuanced fluctuations depending on specific models and fuel types.

The market’s resilience is also evident in the steady demand from retailers seeking to replenish their inventories, particularly as they keep stock levels low due to increased costs.

Segment and fuel type performance

MPVs: Experienced a slightly higher decline than other mainstream sectors, dropping by an average of 1.3%.
Mainstream sectors: Lower medium (C-Sector), supermini, and SUV segments, constituting over 75% of the sold trade data, all saw a decline of around 0.5%, showcasing market stability even in high-volume segments.
Fuel types: Pure hybrids demonstrated the best performance with an average drop of 0.2%, followed by petrol cars at 0.6%. EVs and plug-in hybrids experienced a similar decline of around 1.0%.

EVs - A mixed bag

Despite the overall decline in EV values, some models, including the Audi Q4 E-Tron Sportback, Ford Mustang Mach-E, MG5, Nissan Leaf, Peugeot e-2008, and Tesla Model S, saw an increase in value at the three-year age point.

Outlook

While some apprehension exists due to the significant market realignment in the final quarter of 2023, a repeat is unlikely in 2024. Factors such as more stable interest rates, reduced cost-of-living concerns, and responsible remarketing strategies contribute to a positive outlook. However, the new car market and potential manufacturer strategies to meet ZEV mandate targets will require close monitoring as they could impact the used car market dynamics.