The number of used cars entering the auction halls helped bolster values in October, according to BCA.
Overall, average used car values fell by £146 in October, but 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 was down by around 5% compared to September and this, combined with decent levels of demand, is helping to keep values relatively stable, say BCA.
BCA’s Communications Director Tony Gannon explained: “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.”
It reports that values in the fleet and lease sector were hit hardest in October, falling by £292 (down 3.8%) to £7,419 and year-on-year are behind by nearly £200, while average fleet values actually increased by £76 (1.7%) to £6,036, at Manheim.
But Mike Pilkington, managing director at Manheim, recognised that volumes had also played their part in last month’s results.
“October has continued in much the same vein as September, with no huge influx of volumes impacting on either pricing or conversion rates,” he said.
Gannon added: “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.”
Manheim reports that examples of increases in values for fleet include: superminis, up £299 (9.2%) to £3,535; compact executives, up £237 (3%) to £8,154; and 4x4s up £784 (6.7%) to £12,427.
At 47 months, the average age of fleet cars is four months higher than at the beginning of the year with mileage up by 6,237 over the same period.
Reductions in average values in the fleet sector include: small hatchbacks, down by £38 (0.9%) to £4,142; medium family down £39 (0.7%) to £5,298; mini MPVs down £92 (1.9%) to £4,830; and MPVs down £306 (4.6%) to £6,287.
October has witnessed an increase in trade activity across the Wilsons Auctions network, which is beginning to gather increased momentum following a slight uplift in sales in September.
“Auction halls throughout the Wilsons Auctions network are the busiest they have been this calendar year as demand is outweighing supply,” said Jacqui Le Put, sales and marketing director at Wilsons Auctions.
“Late plate vehicles – between 12 and 24 months old – are delivering attractive prices with Renault and Peugeot marques being among the strongest performers.”
Le Put added: “Demand also remains high for commercial vehicles, though vehicle conditions have deteriorated due to increased mileage and work life cycles – however when vendors are reasonable in terms of reserve price, taking into consideration the condition of these vehicles, bidding still remains fierce.”
At G3 remarketing online activity continues to be strong. “The demand continues for clean, well specified vehicles whilst damaged examples remain difficult to place,” said G3 director Matt Dale.
“There is a level which they will sell but the market is awash with standard spec cars that have suffered considerable hardship during their contract life. It is our opinion demand for such vehicles will remain limited until early 2011.”