Average used car values have fallen by 0.1% in January, according to Cap HPI.

The data firm said this marked an end to market volatility seen between October and December 2023, and was the strongest performance in a month since last March, with the average value drop for a three-year-old, 60,000-mile vehicle only £90.

Cap HPI also said the fall was in line with usual trends for the month, with the market down by 0.3% on average over the previous 11 Januarys.

The firm’s director of valuations Derren Martin said: “It has been well-documented just how far prices fell in the final quarter of 2023, as reflected in Cap Live value movements, which dropped by an average of 10.5% in that October-December period. 

“There was the perfect storm of heavier supply, lower demand, high used car prices and lower-than-market values for fleet companies’ residual values on stock returning to the market. All this meant wholesale sellers were prepared to sell for low percentages of monthly Cap, which drove values down in our Live product.

“Thankfully, this short period of volatility has come to an end. January Cap Live saw some small drops up to the 10th of the month, but at that point, there was an about-turn, and values started to go back up for many models. 

“If the monthly deadline cut-off had been a couple of days later, the monthly movement reported would likely have been a small positive one.”

Cap HPI has reported a slightly bigger fall in values at younger ages, with a 0.5% decline at one-year, 10,000 miles, equivalent to around £285, attributed to more pressure on this age of car due to some keen new car offers and year-end pre-registration activity. 

At older ages, there was a 0.1% drop at five-years old and 0.3% at 10-years, equivalent to average drops of £50 and £20 respectively.

For petrol, diesel, and conventional hybrid cars in isolation, the average movement at three years old was up by 0.1%, while there was a 0.1% move down at one year old. 

Pure EVs and plug-in hybrids fell by 1.8% at the three-year age point, equivalent to over £425, with BEVs dropping by 1.9% (around £720) at one year old.

However, Cap HPI said there was some positivity for EVs, with the Nissan Leaf and Renault Zoe looking competitively priced now and not moving in January, while the Mercedes-Benz EQC, electric BMW i3, and Mini Convertible Electric all increased in value during the month.

Martin said: “Over the coming weeks, we are not expecting a downturn in fortunes, and as stated, January has improved the longer it has gone on. 

“Last February, values went up by 1% in Cap Live and then a further 0.5% in March, before they started to drop from April. It would not be a surprise to see something similar for the next few months this time around.”