Unprecedented rise in used car prices, reports Cap HPI

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Used car prices for three-year-old vehicles rose on average 6.7% in May, the equivalent of £ 800 per car, according to Cap HPI.

This increase, he says, is more than three times the previous monthly increase in values, this increase being attributed to strong consumer demand and declining supply.

“We are truly in an unprecedented period,” said Derren Martin, head of valuations at Cap HPI. “From franchised dealerships to auto supermarkets and independents, overall activity levels have been incredibly strong, with sales rates above budget and in most cases above pre-Covid rates.”

Some showrooms see queues at the door and venues that are almost too busy to serve all of the customers who enter.

With pent-up demand following 3 foreclosure restrictions, so-called ‘accidental savers’ with cash to spend, problems with new car supplies and uncertainty over vacations abroad this summer, consumer demand for used cars remained strong.

However, the current increases in car prices, which have manifested in trade, have not been reproduced in the retail trade, making it increasingly difficult for the trade to buy cars by reverting to the prices of the retail trade. detail announced, explains Cap HPI.

With many outlets continuing to sell cars bought a few weeks ago, not all of them have raised the advertised prices of the cars in line with the increased demand they were experiencing.

Some wholesalers sell cars well above 110% of monthly cap values ​​and some automakers sell their cars at close to 120%, according to data from Cap HPI, with many prices increasing daily. This helped make the auction cars look attractive, although with increased competition they were also selling well ahead of the monthly cap numbers.

All sectors saw their values ​​increase in May. Some examples of volume are Ford Fiesta up 8.5% (over £ 1,000 at one year age point), Audi A3 up over 7% (£ 1,300 at 1 year, £ 800 at 3 years), Vauxhall Zafira up 10.4% (around £ 750 at 3 years), Mazda 6 up 8.1% (around £ 700 at 3 years), BMW X3 up 6.2% at 3 years (around 1,500) and Volkswagen Tiguan Petrol up 10% or £ 2,400 after one year.

“There is no stock tsunami waiting to appear,” Martin said. “There are well-documented new car supply issues, which means less parts exchanges and fleet returns due to component shortages, especially for semiconductors.

“Right now, manufacturers and dealers are replacing some customers with cars they have in stock, but what happens when those stocks run out? There is no doubt that many lease terms continue to be extended as well.

“From the end of June / July, stock levels will have decreased and the shortage of components could well have a greater impact on the offer, depending on the brands. The semiconductor problem may well have an even bigger sting in its tail. “

While current value increases are extremely unlikely to continue at the current rate, according to Cap HPI, prices are likely to remain high without huge volumes appearing in the market.


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