Used Vehicle Price fall in May – Analyst’s Report
Last month’s statistics have now been analysed and it appears as though prices of used vehicles had indeed fallen as expected, though, the fall was not as severe as was initially predicted.
A vehicle that had done 60,000 miles and was 3 years old saw a price drop of only 1.5%, whereas the previous May concluded with a 1.9% price reduction in the used vehicle market. CAP, a Leeds based price guide indicated that the marginal decrease was primarily the cause of an increase in stock levels and a seasonal “dip” which usually occurs around this time of the year.
James Dower, the senior editor of CAP Black Book had this to say on the topic:
This was a stronger result than most would have perhaps expected. It is also worthwhile noting that monthly value movements by fuel type showed that petrol continued to outperform diesel. The strength in petrol performance looks set to continue alongside a slight easing in diesel values year-on-year. Without a clear indication of any final legislation on diesel, there is no reason to expect diesel values to fall dramatically.”
Looking at the SUV sector, we can see a growth in volume, which was accompanied by the largest price decrease in the sector in three years, as vehicles that had averaged 60,000 miles dropped by 2.2% in price.
Dower comments on this, noting that “while there is still significant demand for this sector, there is no doubt that the high volumes of stock available have led to the weakening in value.”
Analysts also suggest that owners of MPV vehicles may be moving to purchase SUV’s instead, as reports indicate that the MPV marketplace also experienced a higher than average reduction of 2.1%.
The seasonal change usually forecasts an increase in Convertible and Coupe Cabriolet sales, and this year was no different, May saw a seasonal increase of 0.5% for the former and 0.3% for the latter.
Dower gave us his concluding thoughts, as he stated that:
“The high levels of stock being held at both dealer and the wholesale level will inevitably cause some downward pressure on values as we move through June. The market has become used to seeing later plate volume entering the market at similar time’s year-on-year. There are still volumes of rental cars to be de-fleeted, and we are likely to see growing volumes of short cycle vehicles in the wholesale market over the coming months.”