The used car market is going strong, as cap hpi reports an overall increase of 2% at the 3-year point during April, equivalent to c.£275 per vehicle.
This rise is higher than in any month since March 2009.
It comes at a time of year when traditionally values tend to drop. However, once the dealerships fully opened again, the pent-up demand has led to more purchases than usual.
Head of valuations at cap hpi, Derren Martin said: “Initially in the first few days of April, values were very stable. Car showrooms reopened on the 5th April in Scotland and 12th April in England and consumer demand went through the roof. There were reports of consumers queuing at the door before some opened and once they were open, there were large queues outside as showrooms had social distance restrictions in place. Car supermarkets, in particular, experienced hugely increased business levels as the opportunities for consumers to turn up without an appointment and browse around a forecourt were seized upon.”
It would appear that it’s more than normal ‘pent-up’ demand, said cap hpi. There are ‘accidental savers’ that have funds from less socialising, leisure activities and holidays over the last 13-months, many of whom are now looking to make a purchase that is either required or desired.
Aspirational purchases of premium brand cars or of convertibles and sports cars, vehicles that may not have been under consideration previously, are high on the agenda and have been for some months.
Convertibles continue to see the biggest price rises overall, by an average of almost 5% or £775 at 3-years old.
SUVs have gone up by an average of 2.4% at the 3-year, 60,000 mile point (almost £350) during April, with models such as the BMW X3, Porsche Macan, Skoda Karoq and Volvo XC40 all outperforming the average, with some going up by more than £1,000 in the month – most of the increase being in the last 2-weeks.
Martin concluded: “We are expecting demand to continue to be high, whilst supply issues in the new car market, not least because of semiconductor shortages, mean there will be consumers turning to used cars and a lack of part exchanges in the market, demand could well outstrip supply.”
cap hpi predicts May will witness wholesale prices continuing to increase as dealers seek to satisfy this consumer demand.