Used car values bounce back in May
The used car market recovered strongly from the April downturn as average values improved by nearly 9% across the board in May, according to BCA’s latest Pulse Report. Fleet values reached a new high point, averaging nearly £8,000 as BCA sold a slightly richer mix of cars during the month.
Month-on-month values improved in all three main market-sectors in a complete reverse of the figures from last month. Fleet/lease values improved by 3.8% month-on-month, part-exchange values saw a modest rise of £35, equivalent to an improvement of 1.2%, while values increased by over £2,500 in the nearly-new sector – an increase resulting from changing model-mix in a low volume sector.
Across the board, values improved from £5,599 to £6,098, reversing two months of declines and returning to an average value broadly on a par with those seen between November 2011 and February of this year.
Used cars averaged 95.4% of CAP Clean in May, up by nearly a point compared to April, while average age and mileage dropped slightly over the month, down to 62.5 months and 59,600 miles.
Year-on-year, May 2012 is a substantial 5.3% ahead of 2011, while average age and mileage have climbed by 0.6% and 1.7% respectively in the same period.
BCA’s Communications Director Tony Gannon commented “While May posted significantly improved figures compared to April, the market is now moving into a period over the summer months where we expect values to remain relatively flat.”
He added “Families are now thinking about paying for their summer holidays, and while the Diamond Jubilee is now behind us, we still have the distractions of the London Olympics and the European Football Championships to come. History tells us these types of events have short-term effects on the retail sector and therefore impact on demand in the wholesale car market.”
Fleet & lease cars averaged £7,934 in May, up 3.8% month on month and the highest average monthly value recorded since Pulse began reporting in 2005. CAP performance was marginally down at 95.73% with the average age and mileage barely changing over the month. Performance against original MRP (Manufacturers Retail Price) was level month-on-month at 39.6%.
Year-on-year, the fleet & lease sector saw a 7.9% value uplift, with CAP comparisons improving by 1.5 points.
Average values in the part-exchange sector improved by £35 to £2,847, equivalent to a rise of 1.2%. Values compared to CAP Clean improved by 1.2 points to 90.4%, while average age remained static and average mileage increased slightly. Year-on-year, values were ahead by 3.6%, despite both age and mileage increasing over the period.
Average values in the nearly-new sector rose sharply to £20,470 – the result of changing model-mix as BCA staged a number of special sales during the month. Average performance against CAP Clean improved by nearly two points to 102.1%.