Changing sector mix, rising volumes and seasonal pressures saw average used car values fall by £270 (4.3%) in March, while fleet/lease values improved to the highest point in nearly two years, according to BCA’s latest Pulse Report.
Across the board, values fell from £6,244 to £5,974, which is very much in line with seasonal pressures as March values have fallen compared to February every year since Pulse began reporting in 2005 (with the exception of 2009 when used values were accelerating rapidly from the price crash the previous year).
Overall sold volumes increased by over 14% compared to February, with lower value dealer part-exchange cars representing the majority of this increase. This change in mix towards lower value cars was largely responsible for the fall in the headline number.
Year-on-year, March 2012 is £222 (3.8%) ahead of 2011. Used cars averaged just over 97% of CAP Clean in March, while age rose from 61 months to over 63 months and mileage remained around 59,000 miles.
Looking at the market sectors, fleet/lease values improved to the highest point in nearly two years, nearly-new values fell as a result of changing model-mix in a low volume sector and part-exchange values improved to the second highest value on record.
BCA’s Communications Director Tony Gannon said: “Although the headline value fell, this was as a result of increased volumes in the lower-value part-exchange sector.
“However, as sold volumes increased quite sharply over the month - up 14% compared to February – it was noticeable that both conversion rates and values were falling weekly during March.
“Looking ahead, we expect volumes to rise in the short-term as seasonal de-fleets and part-exchange cars continue to filter through. At the end of March, BCA recorded a 23% uplift in inventory compared to mid-February and this must have an effect in a supply and demand marketplace, particularly with the Easter holidays imminent.”
Gannon added: “Structurally, the used car market will continue to be short of supply, but seasonal pressures will still apply. With the summer months ahead – typically quieter if previous years are to be believed – it is likely that the short-term pressure on conversions and values seen at the end of March will continue into the near future.
“As always, sellers must be sensitive to buyer expectations and the cyclical changes in the mix of supply and demand and make sure stock is sensibly valued to sell.”
Reflecting this structural shortage of supply, fleet & lease values increased by £81 (1.0%) to £7,795 - the highest point in nearly two years and one of the highest average values on record.
CAP performance fell by half a point to 98.32%, with the average age remaining at 41 months, but mileage dropping by around 1,500 to 48,695. Performance against original MRP (Manufacturers Retail Price) improved by nearly a point to 40.18%. Year-on-year values were ahead by £250 or 3.3%.