cap hpi reports increasing stablisation of RVs during January 2024

WHAT will come as quite a relief to leasecos is the news from cap hpi that the period of RV volatility witnessed between October and December 2023 appears to be calming.

The valuations provider said that January witnessed used values reducing by just 0.1% at three years/60,000 miles, equivalent to an average £90 drop. The data marks an end to the phase of volatility the market saw between October and December 2023.

The fall of 0.1% was the strongest performance since March 2023, added Derren Martin, director of valuations at cap hpi (pictured above). It was, the company said, in line with the average movement in January, (-0.3% for the previous 11 Januarys since Cap Live).

“It has been well-documented just how far prices fell in the final quarter of 2023, as reflected in Cap Live value movements, which dropped by an average of 10.5% in that October-December period. There was the perfect storm of heavier supply, lower demand, high used car prices and lower-than-market values for fleet companies’ residual values on stock returning to the market.

“Thankfully, this short period of volatility has come to an end. January Cap Live saw some small drops up to the 10th of the month, but at that point, there was an about-turn, and values started to go back up for many models. If the monthly deadline cut-off had been a couple of days later, the monthly movement reported would likely have been a small positive one.”

Derren Martin, director of valuations at cap hpi Tweet

At younger ages values did fall slightly more said cap hpi, with a 0.5% decline at one-year/10,000 miles, equivalent to c£285, with more pressure on this age of car due to some keen new car offers and year-end pre-registration activity, but again the movement down is small. At older ages, there was a 0.1% drop at five-years old and 0.3% at 10-years, equivalent to average drops of just £50 and £20, respectively.

cap hpi added that examining the data for petrol, diesel, and pure hybrid cars in isolation, the average movement at three years old was a positive of 0.1%, and a negligible 0.1% move down at one year old. Battery electric vehicles (BEVs) and plug-in hybrids fell by 1.8% at the three-year age point, equivalent to over £425, with BEVs dropping by 1.9% (c.£720) at one-year-old.

Nevertheless, there was some positivity for BEVs, with the Nissan Leaf and Renault Zoe looking competitively priced now and not moving in January, cap hpi continued, while the Mercedes-Benz EQC, electric BMW i3, and MINI Convertible Electric all increased in value in the month.

Derren concluded: “Over the coming weeks, we are not expecting a downturn in fortunes, and as stated, January has improved the longer it has gone on. Last February, values went up by 1% in Cap Live and then a further 0.5% in March, before they started to drop from April. It would not be a surprise to see something similar for the next few months this time around.”