According to the latest data from Cap HPI, the values of second hand cars in the UK were down 1% in April. That is an average £200 dip. This is the first time in 2023 that prices have come down. However, it is not as negative as the headline initially seems. We want to take a closer look at the situation. Then, if you want to start offering a car broker service, you can come to us for help.
That time of year
While the news of a drop in prices will make many people think the worst, it isn’t in this case. In fact, we are at a time of year when values typically fall. It is a yearly occurrence.
The April dip in prices happens for two main reasons. Firstly, it is the time of year where there tends to be an influx of trade-ins. People do it to get their hands on the new number plate, in this case the 23. The wave of supply means prices tend to cool.
Secondly, there tends to be a dip in demand over the Easter holidays. The market can switch off to a degree here because people are focusing on other things.
A 1% drop in values is also not enough to offset price growth in the other three months of the year. Between January and March prices were up by 2.5%. So, if you look at it cumulatively they are still up 1.5% since the start of 2023. That is good news, especially for people who offer a car broker service.
One negative here though is the price of second hand electric vehicles is still slipping in a big way. In April they lost another 4.7%, outpacing diesel (0.9%) and petrol (0.8%). Overall, EVs have lost 34-35% on average over the last eight months.
If you look at the list of vehicles to lose the most value in April, the majority were electric. In fact, not a single vehicle in the top ten had a combustion engine. Some models had drops in the double figures, including the Vauxhall Vivaro Life Electric (11.5%), Seat Mii (11.5%), and Hyundai Kona (10.6%).
An interesting thing here is many EV models have lost value because of the Tesla Model 3. It had a huge dip in prices, losing £13,000-£14,000 in the last eight months. However, that has brought the price more in line with competing models like the Nissan Leaf. So, buyers are more likely to choose a Tesla now. As a result, these other models are now seeing a hit to demand and their prices.
What could happen next?
Some people naturally began predicting this to be the start of used car prices falling off a cliff. However, that doesn’t seem to be the case. It is actually one of the best Aprils Cap HPI has recorded. A big decline in prices is unlikely to follow.
There may be another dip in May because of the three Bank Holidays. However, there is also potential it could bring a rise in business depending on the weather.
Launching your car broker service
At Auto Car Brokers we help people to start their business and maximise their potential earnings. We have a selection of quality materials to help you, including a business manual, forms pack, and series of email templates. They will be resources you can use time and again, creating the foundation for successful broking.
So, if you want to learn more, browse our website. There is plenty of information about everything from what a car broker service is to how you can get involved. Then, if you need more info you can contact us.