Analysis of the used car market by data experts at hpi shows that some vehicles are rising in value due to strong demand.
A combination of factors including the efficiency and low running cost of smaller city cars, a surge in demand for petrol, hybrids and electric vehicles and the continued popularity of SUVs has helped some vehicles to increase in value.
Experts at cap hpi report that this demand helped used car values rise by 0.4% in March with average values increased by 1.2% since the turn of the year, compared to a decline in values of 0.7% last year. The previous strongest year was 2014 when values increased by 0.8%.
A three-year-old Skoda Citigo with 30,000 miles is now worth around £700 more than the same model would have been worth a year ago. There is a similar picture for many other petrol cars of this size, with the Kia Picanto, SEAT Mii and Toyota Aygo all standing out.
A three-year-old Citigo bought in March 2017, with 30,000 miles on the clock, driven for a year adding a further 10,000 miles, would be worth close to £200 more than what the buyer paid for it.
The EV sector has shown similar strength with cars such as the Peugeot Ion, Renault Zoe, Smart Fortwo Electric and the Citroen C-Zero following a similar pattern, these being both EVs and city cars, hence the popularity.
SUVs now account for almost a third of all new car registrations – a considerable increase over the last 10 years. This increasing demand is replicated in the used car market, and values have held up well recently, particularly for medium and small-sized SUVs.
Derren Martin, head of current valuations at cap hpi said: “What we are seeing is some cars in particular sectors increasing in value over a relatively short period. 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 10k miles on the clock and still seeing the vehicle’s value rise very steadily
“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.”