COVID-19 valuations market update.
The latest in our regular market update webinars concentrated on the effect the easing of the UK lockdown has had on car and commercial vehicle values.
You can watch the webinar here.
For dealerships, lockdown was ended in early June and since that point cap hpi has been keeping a very close eye on the movement in the market, reflecting these movements on a daily basis in its live data.
In our previous webinar we had a number of questions around scrappage plans and what the future may look like. As reported in our latest webinar we believe that a scrappage or incentive scheme looks unlikely despite pressure from some quarters.
Instead we believe there will be greater concentration on different transport sectors and approaches, which are covered in detail on our webinar.
Since out last update, the headlines for used value movements are:
- Wholesale volumes increased steadily through lockdown.
- Prices have recovered from the previous dip.
- Demand is currently outweighing supply.
- Values on many older cars is going up.
- There is some pressure on younger used cars.
- Supply/demand balance could switch in next few weeks.
Looking at future vehicle forecasts:
- Values will be hit in the short term but then recover
- The next 12 months will remain difficult, especially for larger cars.
- Expect significant reductions in 1 year forecasts, smaller reductions in 2 year forecasts, and much less impact on 3 year and longer forecasts.
- Strategies for delaying/staggering returns will help mitigate potential losses
In the commercial vehicles market:
- Volumes transacted in the last 10 weeks represents 17.8% of normal data, although volumes have steadily increased in the last 4 weeks
- There has been stronger performance during lockdown and in recent weeks since the relaxation of some of the rules, when compared to 2019
- There is reduced New vehicle availability
- Current social distancing rules within vehicles is affecting certain sectors and model types
- Increased home delivery services continue in the short term
- Brexit and vehicle tariffs remain an unknown factor
- Low interest rates are making funding options attractive
