Used automobile market gives causes to be cheerful after seasonal dip

The used automobile market noticed a typical seasonal decline in December, with the common worth of a three-year-old, 60,000-mile automobile dropping by 1.5%, equating to roughly £260, based on knowledge from Cap HPI.

Round 60% of automobiles at this profile noticed a discount in worth, whereas 35% remained steady and 5% skilled a rise.

This December’s decline was much less extreme than the two.1% drop recorded in the identical interval final 12 months. In 2023, the market confronted sharper reductions of 4.2% within the previous months, culminating in a cumulative decline of 10.5% over the ultimate quarter.

In contrast, the final three months of 2024 demonstrated better resilience, with a extra reasonable cumulative motion of -4.2%, demonstrating the market’s relative stability.

Commenting on the info, Chris Plumb, head of present automobile valuation at Cap HPI, stated: “In step with the retail market, December’s wholesale exercise has entered the standard seasonal slowdown, with conversion charges and efficiency towards cap values steadily declining all through the month. This development carefully mirrors earlier Decembers.

“Whereas some commerce patrons stay energetic, they’re extremely selective, focusing solely on the very best recent inventory supplied by distributors. Key components influencing buying selections embody automobiles with clear mechanical and beauty situation studies, good specs, provenance, fascinating colors, low mileage, and aggressive pricing.

 

“Automobiles requiring mechanical repairs or important beauty enhancements proceed to pose challenges for distributors. Such inventory typically requires a number of makes an attempt to promote and usually achieves decrease returns in comparison with cap clear values. This development has been constant all year long, emphasising the significance of correct automobile assessments to make sure fast and environment friendly inventory turnover.”

Gasoline sorts displayed related efficiency developments, with petrol automobiles experiencing the biggest decline for the second consecutive month at -1.8%, equal to £270.

Plug-in hybrid electrical automobiles (PHEVs) adopted carefully, declining by -1.6% (£350), whereas battery electrical automobiles (BEVs) noticed a drop of -1.4% (£280).

Hybrid electrical automobiles (HEVs) and diesel automobiles had been probably the most steady, each registering a smaller decline of -1.2% (£210).

The wholesale BEV market has continued to evolve, with important progress noticed all through 2024. Public sale gross sales makes an attempt for BEVs now match these of different gas sorts, and this 12 months has marked a record-breaking second for used BEV volumes, displaying a 90% enhance in comparison with 2023. The entire gross sales quantity for 2024 has exceeded the mixed figures recorded between 2019 and 2023.

Within the retail sector, client demand mirrored the seasonal slowdown with a slight enhance in common days to promote. Knowledge from Cap HPI’s retail advert database confirmed a mean of 43 days to promote in December, up from 41 days in November.

Regardless of these seasonal changes, the market has remained comparatively steady, signalling its resilience amid ongoing adjustments in client behaviour and rising adoption of electrical automobiles.

Plumb commented: “The outlook for January, and past, is optimistic and largely constructive. Low provide will proceed to play a key position in sustaining wholesome competitors and demand for used automobile inventory, whereas projected client demand stays encouraging.  

“2024 has been a profitable 12 months for each distributors and retailers. Lowered used automobile inventory volumes returning to the market and wholesome retail client demand have underpinned market stability. At this stage, there isn’t a motive to imagine that the primary quarter of 2025 will differ considerably by way of demand and total stability.”