The UK used car market saw a noteworthy development in August as retail values for three-year-old vehicles experienced an increase, marking the first rise since January.

According to Percayso Vehicle Intelligence, this growth occurred despite the typical summer holiday slowdown, indicating a positive shift in the market dynamics.

New data from Percayso highlights a modest 0.1% average increase in retail values for three-year-old cars, equivalent to approximately £25 ($33.5).

The uptick follows a period of stability and suggests short-term strengthening in the used car sector, which has remained robust against seasonal purchasing trends.

Fuel type performance varied, with diesel vehicles leading with a 0.6% increase, about £100, driven by reduced supply and consistent demand.

Petrol cars rose by 0.4%, while hybrids saw a slight 0.1% increase.

Although electric vehicles (EVs) experienced a minor decline of 0.2% (around £30), it was less significant than in previous months.

Automotive expert Derren Martin commented: “August has proved to be a strong month in the used retail market, despite the holiday season being in full swing, with advertised values actually increasing for the first time since January.

“It is interesting that diesel cars increased in value the most, pointing towards robust used demand for this fuel type that is ailing in the new car world. Whilst EVs did not go up in value overall, they only dropped by a negligible amount, and interest continues to increase, with the government grant piquing interest across the new & used arena.”

Land Rover emerged as a standout brand, with three-year-old vehicle values rising by 3.7% in August, continuing a strong trend from July.

It suggests a resurgence for the brand following recent price adjustments.

Meanwhile, Mini and Vauxhall also performed well, whereas Renault, BMW, and Kia saw slight value drops.

Vehicles priced between £10,000 and £20,000 experienced the most substantial value increase at 0.3%. Conversely, cars under £5,000 dropped by 1.3%.  

While SUVs saw a slight decline of 0.2%, small hatchbacks gained 0.5%, and MPVs excelled with a 3% rise due to scarcity and continued family demand.

Car supermarkets continued their strong performance with a 1.4% price increase, reflecting trends from June and July.

Independent dealers faced a 0.5% decline, while franchise dealers maintained stable prices.

Martin added: “It is good to note that across all areas of the used car market, demand has been strong. All eyes are now on the key month of September to see what stock gets generated by the plate-change month.

“Overall volumes of cars advertised in August were similar to the previous month, indicating a stable supply-demand balance.”