The average values of used cars sold at auction across the board increased from £4,969 to £5,402, equivalent to an 8.7% increase between November and December.
Once again the high volume of quality under 2.5 year old cars sold at auction during December had a positive impact on the average price, reports the National Association of Motor Auctions (NAMA).
Total sales fell significantly in December from 74,701 to 43,444, representing a month-on-month reduction of 41.8%. However the decrease in sales is in line with normal seasonal changes.
The Manufacturer/Rental sector has distorted the overall change in market prices due to the large increase of quality under 2.5 year old cars sold at auction during December.
A more reliable measure of price change can be found in the performance of the other two sectors. Overall prices within the fleet sector remained unchanged whilst the dealer part exchange sector experienced an increase of 4%.
For the fleet and dealer part exchange sectors there was a steadily improving pattern of price gains in evidence as the year progressed.
This culminated in a year-on-year position in December where fleet sector was achieving prices 11.5% higher than a year earlier, sustaining the level achieved in November, and dealer part exchange cars had recorded growth of 10.3%. However it was the constrained supply that was largely responsible for the positive gains.
Andrew Hulme, chairman of NAMA said "December's market and values closed at an encouragingly high level. Auction and re-marketing vendors must have been delighted with the premium values achieved for their stock throughout 2012.
“The market in January has opened with respectable but not spectacular levels of activity.
“The market is healthily balanced between increased supply and increased demand. Whilst there have been some price spikes, the overall value of prices achieved are broadly in line with December's close.
“As always, the grade 1 and 2 condition stock continue to attract the highest prices with the grade 4 and 5 condition stock achieving values consistent with the level of refurbishment required."
He went on to say "NAMA does not expect a further decline in supply in 2013 and therefore in a market supported by typical levels of retail demand expects price stability throughout the year."