Great news for the retail market
By Derren Martin, Automotive Expert Consulting for Percayso Vehicle
Intelligence
The used car market is humming right now, and what we saw in October confirms a strong and encouraging trend. For the second month running, retail prices are on the up, a solid 1.2% rise for three-year-old cars, and dealers are finally seeing their margins widen slightly.
While the overall market is healthy, the real story of the past few weeks has been the dramatic resurgence of the used Electric Vehicle (EV) market. After a year of sliding prices, EVs have firmly reversed that trend, posting the largest increase of any fuel type. October saw a staggering 2.9% surge in average prices, a mighty £600 boost!
This isn’t a fluke; it’s a reflection of compelling value finally hitting a ‘sweet spot’ for consumers. When you have three-year-old popular models like the Tesla Model 3 sitting comfortably below £20,000, and some even dipping under the crucial £15,000 mark, it’s going to grab attention.
This new accessibility is clearly driving the £10,000 – £20,000 price bracket to be the fastest-growing in the market. The £15,000 barrier has proved incredibly important to getting buyers off the fence.
The star performers highlight this shift in appetite. The Nissan Leaf was the undisputed EV hero, with three-year-old models rocketing up by 10% in value, moving from just under £13,000 to over £14,000. The Model 3, too, showed serious muscle, up 7.8%.
These are the cars that independents and car supermarkets are “grasping the nettle” to stock and sell in greater numbers. Car Supermarkets, in fact, increased their retail prices by an impressive 3.1% in October, capitalising on this EV opportunity. Beyond EVs, certain brands are shining. Nissan led the charge overall with a 2.5% increase, followed by Hyundai (+2.0%) and Skoda (+1.9%).
Conversely, the market is seeing some rotation. The star of the previous two months, Land Rover, appears to have peaked, dropping by 0.7% after its recent 10% climb. Audi saw the largest drop, falling by 1.0%. This kind of natural correction is a sign of a functioning, dynamic market.
It’s also interesting to see body style performance. While SUVs and MPVs remain strong, it was the traditionally less-discussed estates (+2.3%) and hatchbacks (+1.2%) that outshone them, suggesting demand for these practical models is strong
against relatively low supply. This upward trajectory in EV demand is great news for the entire automotive market. Strong used car values are the foundation of strong residual values overall, which underpins the confidence of manufacturers and lenders.
Dealers will also be delighted to see some more three-year-old stock of all fuel types from part-exchanges and fleet returns entering the trade market now that the plate change month is behind us. This injection of stock is crucial to maintaining a healthy supply chain.
As we head into the final two months of the year, the big question remains: will this recent, buoyant trend of rising retail prices continue, or will normal seasonality finally kick in?
Consumers are about to pivot their focus to festive season savings, so tracking whether demand remains strong enough to overcome that habitual slump will be fascinating.
It is also worth keeping a close eye on new car activity, particularly in the pre-registration area. Large volumes of pre-reg cars in a short period of time, as manufacturers chase year-end volume, market share or VETs (ZEV) mandate targets, could put some pressure on younger used car values.