December 2023 used car values aligning with normal seasonality says cap hpi

USED car values have enjoyed something of a careering ride during 2023 as restricted supply upped RVs only for supply to ease and consumer demand weaken.

But after a cumulative drop of 8.4% during the last two months, used car values at three years and 60,000 miles fell by 2.1% in December, which says cap hpi is getting closer to normal seasonal movements.

cap hpi analysis shows that the average December movement over the 10 years was a fall of 1.3%, with the largest drop being 2.2% recorded in 2014.

Although the drop does equate to a 10.5% or around £2,000 reduction in the last three months, it is important to remember the context behind the moves – in a six-month period in 2021 values increased by almost 30%, equivalent to over £5,500 on average, and they had barely dropped until the last few months. Average used car values remain around 13% above where they were at the start of 2021.

Derren Martin, director of valuations at cap hpi - main picture Tweet

Other data points from cap hpi are:

One-year values dropped by 1.8% or £550
Values at five years old saw a 2.1% (c£250) drop
At 10 years old there was just a 1.4% (£75) reduction.

Derren added that the cheaper end of the market was holding up better when cars were in the right condition.

All mainstream sectors experienced similar percentage drops, he said, with the largest volume sector – that of SUVs – dropping by 2.0% or around £400. The three models that fell by the most in that sector were all plug-in hybrids:

MG HS,
Citroen C5 Aircross and
Cupra Formentor.

On average, EVs have dropped by over 40% in the last 12 months.

Throughout December, values of EVs continued to decline as demand struggled to keep up with the increasing supply in the market – a trend throughout 2023. Nevertheless, sold data showed a significant increase in the number of EVs sold compared with previous years, with a nearly 100% increase compared to 2022 and a staggering 1500% increase compared to 2018.

There is a positive trend in the average days to sell for different fuel types during the last six months of 2023 in cap hpi’s used retail advert database.

EVs have been the fastest-selling fuel type

EVs had an average of 39 days in stock compared with 45 days for petrol and 47 days for diesel vehicles.

EV values at three years old have decreased by -2.3% (£525) in December. Some models like the Hyundai Ioniq Electric, Nissan Leaf, and Skoda Enyaq have maintained their values.

Petrol and diesel cars dropped by an average of 2.1% and 1.9%, respectively, with pure hybrids dropping by 2.2%.

Looking into 2024, it is likely that supply will continue to outweigh demand, at least in the short term. In the first quarter of 2023, values went up in each of the first three months, something we had not witnessed before. It is unlikely to be repeated in 2024, mainly because of the volume that will be present. However, we are forecasting far smaller drops than over the last three months and a relatively positive start to 2024.

John Doe Tweet