This time last year the used market went seriously pear-shaped.

Values plummeted to record low levels and buyer numbers evaporated as quickly as confidence in the banking system.

Since the turn of the year, things have been ‘interesting’, to say the least, with average used values climbing almost as quickly as they dropped.

Factor in a subdued new car market, dealers desperate for used stock and extended fleet replacement cycles starving the market of their usual supply, and the used car market went into overdrive as demand hugely outstripped supply.

Ten months on and the rollercoaster ride appears to have slowed.

It was always going to happen, and September’s auction hall results have finally shown a wobble after eight months of unprecedented increases in used car values.

While BCA saw average fleet values rise by 3.5% to £7,850, that is a reduction in performance against CAP prices – down from 100.25% to 99.87% of CAP clean. At Manheim, average fleet values fell by 2% to £6,550.

BCA’s communications director Tony Gannon urged a note of caution: “The headline numbers do not tell the whole story – our data shows there was a marked shift in the market that took place in mid-September.

“Average values for the two weeks commencing September 21 fell sharply, as did performance against CAP.

"Weekly fluctuations are not uncommon and so this two-week period should be viewed with caution.”

In the overall used car market, Manheim saw values rise by 0.6% to £7,436 and BCA recorded a less than 1% decrease.

Manheim Auctions and Remarketing managing director Mike Pilkington said: “The first recorded fall in average values in the fleet sector this year and the modest increase in overall values suggests the market is inevitably beginning to level off after unprecedented growth this year.

“Conversion rates also fell in September. However, they remain significantly higher than September 2008 levels.”

CAP echoes the sentiments of the big two, with its Black Book editorial saying: “The market has reached a plateau, with the bulk of this year’s major price increases now significantly slowed. Stability is therefore returning to the market.”

It added: “There are some signs of increased supply, with ex-rental stock in particular beginning to appear in greater numbers.

“This is, however, nowhere near in the same proportion as seen in recent years and will be welcomed by dealers who have been starved of stock for much of the year.”

But while rental stock may be appearing in greater numbers, the products offered are, in general, older thanks to rental companies extending lifecycles from the traditional norm of around six months, to a year or even higher.

Blame manufacturers restricting supply, and also raising new car prices to off-set currency fluctuations for that one.

CAP research among dealers incidates a strong likelihood of them making more speculative stock purchases before the new year.

Another trend CAP has identified is that of ex-leasing stock appearing at auction which is often more attractively presented than has often been the case in previous years.

It added: “Disposers are clearly making a greater effort here, partly in anticipation of the market returning to stability and the need to offer stock that stands out from the crowd.”

Much of this can be credited to leasing companies paying even more attention to de-fleet charges than before as they attempt to claw back refurbishment costs.

In the good times these charges would be waived, but tougher times are resulting in more rigorous enforcement.

According to Manheim, end-of-lease charges recovered by contract hire firms from fleets have risen from £265 per vehicle to £290 on average.

With both houses reporting varying degrees of fortune, they are offering advice to sellers to ensure that stock sells quickly and for the best possible price.

BCA’s Gannon said: “While these factors have combined to take some of the heat out of the market, we are still seeing well-presented and nicely-specified cars and vans achieving good results.”

Manheim’s Pilkington added: “Although we do not foresee any major fall in overall values because stock levels are reducing and buyer interest remains high, we are cautioning vendors to adopt realistic pricing strategies to ensure that vehicles are sold in the weakening market.”

David Scarborough, group sales director of independent auction company Aston Barclay, commented: “There will always be a market for those outstanding and interesting models and for top-condition vehicles.

“However, it is the vehicles that carry damage, have been badly repaired or simply miss certain items of specification that need serious consideration when selling in order to find buyers.”

Sector-by-sector analysis of used car market values

Executive

This sector is normally the first to show signs of weakness, but price movements are closely in line with the rest of the market and, with a few exceptions, most cars have moved by less than 1%.

Strangely, petrol-engined models have seen some large price rises – Chrysler’s 300C and the Volkswagen Phaeton have improved by around 1.5% at three years/60,000 miles, while petrol Mercedes-Benz S-Classes have rocketed by 5%.

MPV

This sector is enjoying a period of strength, with the best performances coming from the large people carriers – most notably Renault’s Espace rising by 1.5% at three years/60,000 miles.

Kia’s Sedona diesel has gone up by 3.5%, Ford’s S-Max and the Mitsubishi Grandis by 1.5%.

Smaller models have also performed well – Citroën Xsara Picasso, Renault Scenic and
Vauxhall Zafira moving up 1.5%.

Less fortunate is the Fiat Multipla diesel – its challenging styling resulting in a 6% drop.

City cars

A very static market at three years and 30,000 miles, down by 0.2% overall, although Fiat’s Panda has bucked the trend, up 0.5%.

Scrappage has protected this sector from the peaks and troughs of used values, although there are question marks over its ultimate impact.

One scrappage star, Hyundai’s i10, has seen its prices fall 3.5% at one-year/10,000 miles.

Lower-medium

Another sector tracking at a flat rate, with an adjustment of -0.5% in values at three years/60,000 miles.

The only notable change has been a reduction in the strong premiums for Vauxhall’s Astra Sport Hatch, with prices now more on a level with the five-door version.