As the SMMT reports a 9.3% year on year increase in new car registrations for July 2012 – the best month so far this year –British Car Auctions (BCA) reveals that the used car market is also experiencing increases in values, reflecting a relative shortage of stock in the marketplace as a whole. According to BCA’s latest Pulse Report, used car values increased by 9.7% (£547) year on year in July, and increased 3.6% compared to June 2012.
The trend is clearly seen in both the fleet/lease and part-exchange sectors, which recorded 15.0% and 10.3% year-on-year value improvements respectively.
BCA’s figures show that average used car values increased to £6,180 in July from £5,964 in June. Fleet and lease values reached another new high point, averaging £8,053 – up just £11 from June’s figure – but still the highest monthly value on record. Part-exchange values posted a £75 month-on-month rise, to reach £2,949 – also the highest average value on record since BCA began publishing its Pulse Reports. Nearly-new values improved by £780, largely as a result of changing model mix in this low volume sector.
Across the board, used cars averaged 96.94% of trade guide prices in July, up by nearly a point compared to June, while average age and mileage both fell marginally over the month, to 62 months and 59,000 miles.
BCA’s communications director Tony Gannon commented “It might seem counter-intuitive to report that used values have apparently climbed so sharply year-on-year, despite the continued challenging economic situation and relatively weak retail environment. However, supplies reaching the wholesale used car market are quite significantly down on the peak seen four to five years ago. The combination of lower new car sales and the tendency for vehicle owners to extend their replacement cycles simply means less stock is available to be sold.”
“The real shortage is of good quality, ready to retail used cars, which is leading to fierce competition and generally rising values for the best examples reaching the remarketing arena. Dealers need cars to sell and they are increasingly looking at online routes to increase their stocking options. BCA are seeing rising volumes being sold via our Bid Now, Buy Now and e-Auction channels, alongside our well-established Live Online service. 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, and there will be the usual volume uplift in September and October that sellers should be planning for now.”