Stock shortages drive used car values up in August
The headline average monthly used car value in August improved by 1.8% to £7,037, with fleet & lease values reaching record levels, according to BCA’s latest Pulse report. Year-on-year values remain well ahead, up by 14.2% as good quality stock remains in short supply and demand from professional buyers remained relatively strong last month.
Across the board used cars averaged £7,037 in August, up by £162 compared to July, and significantly ahead of August 2012 by £879 (14.2%). Average mileage continues to fall – down by around 3,000 miles compared to last year - and cars are one month younger on average when sold in 2013. Average performance against CAP Clean is 0.7% up, year-on-year.
Fleet & lease values improved to a new record value of £8,898 and remain significantly ahead year-on-year. Dealer part-exchange values fell for the third consecutive month but also recorded a substantial year-on-year uplift. Nearly new values rose sharply largely as a result of a change in model mix.
Simon Henstock, BCA’s UK Operations Director commented “The short term prospects suggest that volumes will rise from mid-September onwards and this traditionally exerts some pressure on average values and conversion rates. While the best quality stock – the Condition 1 and 2 cars – will continue to attract a lot of buyer attention and achieve strong prices, it is the poorer presented vehicles that might begin to struggle. If the market conditions tighten then these vehicles will need to be competitively priced if they are to be sold.”
“Looking ahead to the final quarter of the year, we expect the used market to generate good volumes of business if demand is maintained at the level we have seen throughout 2013 so far. Stock availability will remain critical, however.”
“Longer term, economic confidence is the key factor going forward. Recent indicators suggest the economy is improving and this may tempt even more retail buyers to consider changing their current vehicle for a ‘newer’ used car. There will always be activity in the used car market caused by changes in lifestyle – the growing family, a young driver passing the driving test, a windfall purchase – but we must not lose sight of the fact that many families continue to struggle with rising costs while wages are falling in real terms.”
Fleet & lease cars averaged £8,898 in August, the highest monthly value ever recorded for the fleet sector and an increase of £118 (1.3%) compared to July. CAP performance improved for the third month running to 97.34%, while retained value against original MRP (Manufacturers Retail Price) was static at 41.69% across the fleet & lease sector at an average of 39.8 months and 45,000 miles. Year-on-year, the fleet & lease sector recorded an uplift of £744 (9.1%), with average age and mileage falling compared to 2012.
Average part-exchange values fell back for the third consecutive month by £48 to £3,642, but remain near the record levels recorded in May 2013. Year-on-year values were ahead by £691 - a significant 23.4% up on August 2012 and, similar to the fleet & lease sector, average age and mileage are both down compared to 2012. CAP performance improved by over two points to 96.6% in August.
Nearly new values rose again in August climbing from £19,703 to £20,555 – the second highest monthly value for nearly-new stock recorded this year, with performance against CAP Clean improving again to 99.4%. Nearly-new values will always be affected by changing model mix in this low volume sector, but demand for retail-ready stock is obviously helping to keep values relatively firm.
