BCA’s latest Pulse report shows that average used car values fell back by £146 in October as the used market continued to settle into a more typical seasonal pattern.
The fall of just under 2.5% could have been larger due to the continuing economic uncertainty and fiscal pressures affecting ‘big ticket’ transactions. However, supply issues still affect the marketplace - volumes were down by around 5% compared to September – and this, combined with decent levels of demand is helping to keep values relatively stable.
Values in the fleet & lease sector were hit hardest in October, falling by £292 (down 3.8%), with nearly-new values losing a more modest £95 – a drop equivalent to less than half of one percent. Part-exchange values were effectively flat – falling by just £5 over the month, underlining the continued demand for budget cars and the relative shortage of supplies in this sector.
The average used car value at BCA fell to £5,792 in October from £5,938 in September, with performance against CAP Clean falling by over two points to 96.24%.
BCA’s communications director Tony Gannon commented “October has heralded the typical slowing in demand that the market usually experiences in the run-up to the Christmas period. However, the effect has been tempered this year by the continuing shortage of retail quality stock – the competitive pressure for the best examples in the wholesale arena has meant average values are probably stronger than expected.”
Gannon added “Professional buyers remained active in October, although levels of demand began to fall off towards the latter part of the month. The shortage of corporate entered stock meant that conversion rates were generally good for volume vendors, unless vehicles were offered in poor condition or valued out of step with market expectations. The budget sector remains very busy and again is short of stock – competition can be intense the best presented models, particularly small hatches and economical city cars.”
“At the other end of the scale, there were some remarkable – albeit isolated – examples of executive models making exceptionally strong values, while the prestige market enjoyed another strong performance during the month.”
“Used cars continue to be the battleground for dealer profitability and this will remain the case while new car retail sales continue to be slow.”
Year on year values remain behind by £229, a similar figure to that recorded over the preceding two months. Values remain well ahead compared to October two years ago, however, with over £1,000 separating the two figures.