BCA’s latest Pulse report shows that the headline average used car value declined by 1.1% in February, although year-on-year values were up by a significant 13%. Average used car values remained above £7,000 for the third consecutive month as the market continued to be short of retail quality stock.
Across the board used cars averaged £7,056 last month, down by £81 compared to January but significantly ahead of February 2012 by £812 (13%). February 2013 recorded the third highest average monthly value since Pulse began reporting in 2005. Fleet & Lease values climbed to a new record level, while dealer part-exchange values declined marginally.
BCA’s UK operations director Simon Henstock commented “Despite values being at record levels, there remains an underlying fragility in the marketplace reflecting the difficult on-going economic conditions. Prices are high largely as a result of the constricted supply, and – seasonal variations aside - we should expect a similar picture across much of 2013.”
“However, we know from experience that values cannot keep rising and there will inevitably be an adjustment at some stage. How this will manifest itself is impossible to judge at this stage, but with the Easter break often representing a watershed in demand we might see some pressure on values in April. With the March plate change now in full swing and more confidence in the retail new car market, we expect to see significantly higher volumes and much greater choice for buyers at auction over the next few weeks.”
He added “The dynamics of the wholesale markets are inevitably going to change over the next few weeks. Vendors will need to be aware of this when valuing their vehicles and recognise that the market will experience a seasonal change in demand combined with a major upswing in supply.”
Fleet & lease cars averaged £8,851 in February, rising by £325 compared to January and establishing yet another record monthly value. CAP performance improved by a point to 98.8%, while retained value against original MRP (Manufacturers Retail Price) improved by over a point to 42.6% across the fleet & lease sector at an average of 40 months and 46,000 miles. Year-on-year, the fleet & lease sector recorded a significant £1,137 (14.7%) uplift. Average age and mileage were up month-on-month, but down year-on-year.
Average part-exchange values remained above £3,500 for the third month in a row, as demand remained intense at the budget end of the marketplace. Although values declined slightly to £3,556 (down just £24/0.6% compared to January’s record figure of £3,580), CAP performance improved again to 97.2% and year-on-year values were ahead by £709 - a significant 24.9% uplift compared to February 2012.
Henstock commented “This rise in average prices at the ‘value-for-money’ end of the market must be a reflection of the current economic conditions. As household budgets remain squeezed, the increased demand from motorists for affordable transport is driving values upwards. There is likely to be continued demand for ‘budget motoring’ from drivers who simply cannot afford to buy a more expensive car, but still need personal transport and need it quickly, because their current vehicle has become too expensive to run, repair or maintain. “
Average values fell in the nearly-new sector by £1,684 to £18,599, while performance against CAP Clean fell by over half a point to 100.1%. Nearly-new values will always be affected by changing model mix in this low volume sector.