Continuing shortages in the wholesale used car markets have resulted in record average used car values according to BCA’s latest Quarterly Pulse Report.
With used cars averaging £6,216 across the period, Q3 12 recorded the highest value since Pulse began reporting in 2005. This represented a significant £325 (5.5%) improvement over Q2 and was £293 (4.9%) ahead year-on-year.
Fleet and lease values increased to £8,177, the highest on record and ahead year-on-year by £917 (12.6%). Part-Exchange values averaged £3,002 – also the highest Quarterly value recorded since Pulse began publishing in 2005 and up by £159 (5.5%) compared to Q2 12 and ahead by £304 (11.2%), year-on-year. July, August and September recorded the three highest monthly Part-Exchange values on record.
BCA communications director Tony Gannon commented “With on-going economic pressure, rising costs and a relatively weak retail environment, it might seem counter-intuitive to report that used car values continue to climb year-on-year. However, supplies reaching the wholesale used car market are quite significantly down on the peak seen four to five years ago and there is a real shortage of good quality, ready to retail used cars. This is leading to fierce competition and generally rising values for the best examples reaching the remarketing arena.
He added “This stock shortage is a long term issue and is unlikely to change until new car volumes pick up significantly and the economy improves enough to generate a bigger churn of vehicles in the marketplace. This doesn’t diminish the effect of the typical seasonal pressures, of course, which have seen values and conversions weaken in early October.”
Gannon continued “Q3 saw a ‘richer’ mix of used cars compared to Q2, with fleet/lease volumes representing a slightly increased proportion compared to part-exchange volumes.”
Looking in more detail, fleet & lease values (chart below) have increased steadily over recent quarters, reflecting the structural shortage of supply affecting the market. The Quarter 3 2012 value of £8,177 was the highest on record (as was the value of £8,339 recorded for the month of September). Year-on-year, Q3 12 was ahead by £917 (12.6%).
In the part-exchange sector, Q3, 2012 saw the three highest monthly values on record and - at £3,002 - the highest quarterly value recorded since Pulse began publishing in 2005. The average Q3 12 PX value was up by £159 (5.5%) compared to Q2 12 and ahead by £304 (11.2%), year-on-year.
Based against the average values achieved in Q1 2005, the BCA Index tracks the quarterly market performance to give a clear view of where prices have been as well as indicating where they might go. Unsurprisingly, given three months of consistently high values in Q3 the BCA Index reached 130, the highest point on record and up six points year on year and seven points on the previous quarter.