Growing used car supply is being soaked up by strong retail demand according to the latest market report from CAP Automotive.
Despite significantly more cars in the market today than a year ago, average values saw a modest rise during February which may continue during the first 2 weeks of March, say CAP market experts.
According to Black Book Live, there is evidence that used car volumes are now up to 17% higher than at this point last year.
CAP attributes the increase to a growing number of part-exchange cars from private owners taking advantage of low-finance new car deals along with more cars appearing from fleets which held on to vehicles for longer than usual during the economic downturn.
The backlog of poor condition cars reported by CAP last month has also begun to dissipate as buyers have been forced to acquire less desirable stock and bite the bullet on reconditioning costs, rather than offer empty spaces on the forecourt.
Black Book Live senior editor, Derren Martin, said: “The increase in wholesale used car volume has been balanced by a continued strong retail appetite for used cars as the economy continues to pick up.
“We have been particularly interested to see that the largest increase in volume has been for cars over four-and-a-half years old, which grew to 64% of all cars in the market during February, compared with 62% at the start of last year.
“Those cars are also showing higher mileage than cars of the same age did a year or more ago, which supports our previously reported view that many people have been holding onto their cars longer, while waiting for economic confidence to return before stepping back into the market.
“On the flip-side, we are seeing lower mileages than before, on the younger cars, and those lower average mileages are probably influenced by the growing number of pre-registered vehicles appearing in the market.
“However, despite the overall increase in volumes, prices have remained strong and this is particularly true of older cars which are less affected by the strong offers on new cars than 0-12 month old vehicles.
“March will bring a further influx of part-exchange vehicles into the market and Black Book Live will be monitoring daily for any impact that has on overall prices.”