Used vehicle retail demand remains relatively strong through the first half of October. The expected higher volumes of used cars that we forecast to enter the open market have now become visible and, as previously suggested, we have started to see some erosion in values. The additional stock available to buyers has magnified the gap in desirability between quality, clean stock and vehicles that require higher reconditioning as buyers could afford to be more selective. Expectations of price performance for poorer grade vehicles should be considered accordingly.
We reported a potential surge in tactical registration activity at the end of September and the SMMT figures suggesting that over 100,000 new vehicles were registered on the last working day appears to reemphasise the findings of the cap hpi survey. Indeed, we have already seen significant volumes of 66 plate vehicles in the open market advertised on many different platforms. Certain manufacturers have been more aggressive in this area than others and are likely to see a squeeze on nearly new values over the coming weeks and months as dealers look to retail these units in a competitive market place as many of the tactical registrations appear to be identical derivatives.
The second half of October is likely to continue to see values weaken as the balance between demand and supply falls more in favour of the buyer. However, that being said, the used retail market seems in good health and quality, well specified and non-duplicated examples are likely to still command strong prices.
James joined cap hpi in May 2016 and is responsible for the production of black book valuations, managing the team of 7 editors. With over 27 years’ experience within the motor industry he has worked within motor retail - from volume brands to high end prestige, motor finance and most recently as Sales and Marketing Manager for a vehicle remarketing company. James keeps a close eye on current market conditions and reports on valuation performance alongside key industry issues through his editorials and press releases.