Dealers under pressure as used car values in freefall

Used car values suffered their biggest monthly fall in 12 years in October, hurting car retailers and threatening to drive up finance costs for new cars.

Values of three-year-old cars slumped 4.2% in the month, equivalent to a drop of £850 on average, according to the latest Cap HPI report. “There is no escaping that this is a considerable reduction in value,” the report concluded.

Used car values have now fallen 14% since April following an unprecedented spike during the Covid aftermath, when new cars become tough to get hold of, Cap figures show.