RESIDUAL values have been dropping during lockdown 2.0, says cap hpi.
However, the vehicle valuation specialist says that cooling prices are due to seasonal readjustment following a bull run in its latest analysis of trade-to-trade sales data.
cap hpi has detected a decline in trade prices by 2.1% in October and by over 2% in November to date or around £450 in total on a typical three-year old car. Nevertheless, it says that retail values have remained relatively steady for the moment.
With pent-up demand from the first UK lockdown and consumers buying to avoid public transport both now declining, trade buyers are wary of paying previous high prices for cars that may now sit on their forecourts for longer and will potentially need to be reduced. This has led to a decline in trade prices across the board.
Derren Martin, head of valuations, cap hpi
Martin added:
“It is important to remember that, when comparing the same type of car at the same age and mileage point today to a year ago, prices are some 5% ahead of where they were, when normally we expect a decline, as models deflate in price whilst moving through their lifecycle. This upward movement that the market has experienced is not unprecedented, but history shows us that it is generally unsustainable.”
Automotive and fleet writer for Broker News
