Prices falling in the used car market
CAP Used Car Price Index – June 2011
Year on year changes in 3yr old car values compared with June 2010
CAR VALUE DEPRECIATION has accelerated rapidly over the last quarter, according to CAP, the used car pricing experts.
Measuring typical 3 year old car values compared with 12 months previously reveals that only the most exotic vehicles are immune to the downturn in used car values that began around March this year.
The most rapidly depreciating cars in today’s market are upper medium – Mondeo/Insignia size – and small executive – BMW 3 Series and similar – which are worth 10.5% and 12.5% less than their exact equivalents at the same age and mileage a year ago.
After a strong start to the year, which saw demand outstripping supply and many used car values actually rising, the market has struggled since March when many cars were worth significantly more than the exact equivalent examples a year before.
The latest figures also mark the end of the long upward march of 4x4 values. In one of the most remarkable used car price trends of recent years, 4x4s increased in value every month for 2 years after a spectacular fall in values during 2008. In March the average off-roader was still valued at more than 11% higher than its equivalent 12 months before. Today they have slipped into negative figures for the first time with a 0.1% reduction on a year ago.
CAP believes the market will continue to fall for the rest of the year as low consumer confidence keeps demand out of both the new and used car markets. Used prices are still ahead of where they were two years ago which also suggests further reductions will follow, as the market returns to ‘trend’.
Another common feature of this year’s market has been the lack of high quality 3 year old cars, which are vital to dealers as prime stock.
Mike Hind, of CAP, said: “There is no reason to expect prices to firm up at all this year in light of the climate of austerity and low consumer confidence. The last thing most people want to think about at the moment is changing their car, unless they need to. So retail demand will stay low and prices will consequently keep falling.
“The best time to buy is always the back end of the year when prices tend to be lowest. And because customers are so few and far between at that time dealers will be even more keen than usual to make you an offer you can’t refuse. Of course, your own car will also be worth less but if it’s well maintained and clean, you will have the strongest chance of a good deal.”
ends
* Notes for editors: Market price performance in the CAP Used Car Price Index is benchmarked at 3 years old. Actual car values will vary according to mileage and retail prices will vary according to the purchase source. Because cars are benchmarked at one specific age this chart does not display actual depreciation/appreciation over time.
For further information contact Mike Hind, Communications Manager, CAP on 0113 222 2044 / 07710 152030
This news release is intended to be of interest to motoring writers and other media professionals. If you wish to opt out of receiving news stories from CAP please email mike.hind@cap.co.uk
CAP used car pricing information has been trusted by motor trade professionals for more than 30 years. The company provides trusted and accurate pricing and technical information on cars, vans, motorcycles and trucks to the UK automotive industry every day. As well as helping dealers, fleet operators, insurers, vehicle manufacturers and finance providers, CAP information also operates at the heart of many leading vehicle marketing websites and car sales portals, including Britain’s largest – AutoTrader – helping consumers safely make the best informed decisions about their purchase choices.
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