Largest drop for 12 years in value of used cars

Following last week’s article, cap hpi experts reported the drop in October was the largest fall in used car values in a single month since May 2011, over 12 years ago.
The drop of 4.2 per cent in average value is equivalent to £850. Derren Martin, director of valuations, said: “Whilst used car prices remain high from prior years’ increases, there is no escaping that this is a considerable reduction in value. This is a considerable realignment, with values having dropped by a cumulative 13.6 per cent in seven months since April.”
There is likely to be more offers between now and the end of the year.
There have been more announcements confirming the flurry of Chinese electric car products on their way to Europe and while there are still many motorists that are not ready to consider an electric car, demand is certain to grow over the next few years.
The most recent announcement is from Stellantis, with brands including Peugeot, Citroen, Fiat, Abarth, and Vauxhall in Europe and Jeep and Chrysler in the USA, to build an EV powerhouse in China with a I.5 billion euros bid to secure a 20 per cent stake in Chinese electric carmaker Leapmotor.
Stellantis is already encouraging its dealers to retail a number of its group brands from shared locations, and this might lead to existing Stellantis franchisees across Europe and specifically here in the UK, being able to add Leapmotor car showrooms in the medium term, plus other Stellantis products underpinned by its Chinese partner’s technologies.
Stellantis CEO, Carlos Tavares, said: “As consolidation unfolds among the capable vehicle start-ups in China, it becomes increasingly apparent that a handful of efficient and agile new generation EV players like Leapmotor, will come to dominate the mainstream segments in China. We feel it is the perfect time to take a leading role in supporting the global expansion plans of Leapmotor.”
The Volkswagen Group have acquired a five per cent stake in XPENG and these moves show an acknowledgement for the success of this market in China and will put further pressure on European governments as they consider tariffs on Chinese imports.
Another challenge for the electric vehicle market has come from insurers who are making it more expensive to insure an electric car than a petrol or diesel equivalent. Some have refused to insure them because of the difficulty of repairs and the costs of replacements.
The average comprehensive policy across all types of vehicles cost a record £511 at the end of June, 21 per cent more than a year earlier, according to the Association of British Insurers, an industry body.
The comparison site Confused.com said that premiums for electric cars had gone up 72 per cent in the year to September, compared with a 29 per cent increase for petrol and diesel cars.
Confused looked at the average cost of insuring four popular electric cars and their petrol or diesel equivalents. These vehicles were at the expensive end of the market. The average annual premium for an electric car was £959, while the average for petrol and diesel cars was £848. Some of this is due to the pricing of electric cars which are more expensive than petrol. For example, the Vauxhall Mokka electric is 31 per cent more than its petrol equivalent but this will change as production and sales of electric cars overtake the petrol versions.
There is little doubt the Chinese imports will also put pressure on world motor manufacturers to bring prices more in line.