Motor trade sellers will be pleased to hear that the prices of secondhand cards have increased during the last year due to rising demand from consumers. New research published by vehicle valuation experts, cap hpi, shows a notable uptick in the popularity of smaller city cars, as well as SUVs and electric vehicles.
Used car prices have been steadily increasing for some time now. But demand has strengthened during the first few months of 2018, with values soaring by 1.2% during that time. Secondhand car values increased by 0.4% in March alone, and it is expected to be a strong year overall. It could also surpass the previous strongest year, 2014, when values climbed by just shy of one percent.
Cap hpi said the data was surprising as cars are traditionally an asset that depreciates over time, but that it was now possible for car buyers to pick up a high-quality secondhand vehicle and actually be able to sell it on twelve months down the line and make a profit. In addition to smaller cars and SUVs, petrol, hybrid and electric vehicles are also currently highly sought after.
Certain cars in specific sectors are increasing in value within relatively short periods of time, according to cap hpi head of current valuations, Derren Martin. He continued: “The scale of this is unprecedented as cars are generally regarded as a depreciating asset. Some consumers are now starting to reap the rewards of picking up a vehicle 12 months ago, putting 10,000 miles on the clock and still seeing the vehicle’s value rise very steadily.”
It means many vehicles are now worth significantly more compared to a year ago. For example, a car owner who has put 30,000 miles on the clock of a three-year-old Skoda Citigo can expect to see a valuation that is £700 higher when compared to what it would have been worth back in April 2017. Other vehicles including the Toyota Aygo, Seat Mii and Kia Picanto would also see similar increases in valuation.
This means someone who bought a Citigo this time last year and put an additional 10,000 miles on the clock and sold it in the coming weeks would be looking at a £200 profit. The price rises are not limited to a particular type of car or model either as SUVs and electric vehicles are both turning in the same levels of appreciation on the secondhand market.
Martin concluded: “The sectors showing the main areas of appreciating values continue to be city cars, superminis and lower medium-sized cars. Also, some petrol and hybrid SUV prices in the used market have shown real strength in recent months – there is strong demand and currently relatively low supply. Drivers are beginning to warm to EVs as confidence grows in availability and reliability. The increase in demand for smaller vehicles that are pushing up values is partly as a result of consumers downsizing but also a desire for petrol vehicles.”
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