Marketwatch: Mixed opinions on 2006 start to used car market

EXPERTS are divided on the buoyancy of the used car market’s start to 2006.

BCA reports a bullish first 10 days in January, with the notional fleet car (one company owner, 60,000 miles/36 months) rising in value by more than 7% on last year.

The nearly-new market was the strongest performing sector in price terms, with values averaging £12,803 over the start of the month. This was £2,032 ahead of the same period last year, a significant rise of 18.8%. Light commercial vehicle values also rose by 9%. However, BCA managing director Andrew Hulme warned of caution.

He said: ‘While it is always pleasing to report a good news story for vendors at the start of the year, there are no indications that longer-term price trends for 2006 are set to rise significantly.

‘The market is still cautious and while there are some good levels of activity in used car retail operations, confidence remains fragile.’

Manheim also reported a hectic start to the year. Analysts at the firm believe that well-presented cars in good condition are outstripping CAP clean figures, as buyers ignore the guides and go on gut feeling.

Best sellers at Manheim auction houses have been well-specced cars, top marques with leather seats, automatic gearboxes, satellite navigation and good service histories. Convertible values are also on the rise, both in price and interest.

The mood was more cautious at CAP Motor Research. Senior analyst Stuart Empson said January’s sales seemed to be on a par with expectations. He said: ‘If you go from December to January there’s an uplift in values but the expectation of a strong January didn’t materialise.’

He said the supermini and lower-medium sectors had performed especially well, but upper-medium, small executive and mini-MPV cars did less well.

Generally, the picture was more or less the same as the equivalent period in 2005, Empson said.

Adrian Rushmore, managing editor of Glass’s Guide, said auctions had witnessed a marked improvement in attendance and buying sentiment.

But he added: ‘In contrast to previous years, there was nothing to resemble a buying frenzy. ‘Cars that were attracting little or no interest before Christmas were being viewed in a more positive light unless the conditions were poor.’

Rushmore also highlighted convertibles as being of increased value, as the prospects of finding retail customers had significantly improved.

Fleet market – 2005 v 2006

First 10 days trading analysis – BCA (Jan 4, 2005 to Jan 14, 2005 & Jan 3, 2006 to Jan 13, 2006)