The UK’s used car market has shown a ‘marked change’ in the last week, with signs of weakness already appearing, but longer-term impacts are still very much an unknown.

Cap HPI’s forecasting team is currently predicting values to drop by more than the seasonal norm over the coming weeks but says there are many factors at play in the long term

So says Derren Martin, head of valuations UK at Cap HPI, as the firm’s data shows that values in Cap HPI Live are down 1.5% on average in the last week in response to the coronavirus pandemic.

Martin said: “There is the likelihood that demand will continue to decline, and with it, values in the short term. Our forecasting team is currently predicting values to drop by more than the seasonal norm over the coming weeks.

“Our short-term forecasts for the coming months will be worse than otherwise would have been the case, as the effects of Covid-19 continue to be felt. At present, our longer-term forecasts for one to five years in the future are likely to remain broadly unchanged, as we wait to see longer-term impacts on new car registrations, especially following plant closures from many manufacturers. A fall in registrations this year could help support used values in the long term, and there are also a great many other factors which could yet influence values in various directions.”

Martin added: “The automotive industry is navigating uncharted waters, and the coming months will provide an unprecedented challenge as the UK has to adapt to new ways of working, socialising and shopping.”

Actions being taken by Cap HPI in a fast-moving market include reviewing daily data feeds that are received from trade and retail sources, and reflecting the changes.

Martin said: “Our Business Continuity Plan has been enacted, and our valuation services will continue to function as normal.”

Martin finished: “As a call to action, I would encourage all customers to use the data and tools at their disposal. The market is changing daily, and situations such as this are the reason cap Live was developed.”