Car auctions expect September surge

It is crucial that vehicles sold at auction over the next few months are presented and priced correctly given the anticipated surge in availability, according to the Society of Motor Auctions (SMA), part of the Retail Motor Industry Federation (RMIF).

Alistair Manson, head of the SMA commented: ‘The September plate change traditionally accounts for over 17 per cent of annual new car sales and will lead to a large influx of cars into the auction wholesale market as fleet disposals and part exchanges work their way through the industry.’

However in addition to higher volumes, average prices for used cars in the nearly new and fleet and leasing sectors have also unexpectedly risen in the second quarter to record levels contrary to the pattern of previous years.

Manson continues: ‘There will inevitably be additional pressures on prices going forward against a more uncertain economic outlook. Greater de-fleet and part exchange volumes expected over the next few months present a great buying opportunity at auction, but equally, greater competition makes it more important than ever for vendors to present and price vehicles correctly.’

To maximise returns from vehicle disposal, the SMA stresses that it is vital to:

Ensure vehicles are individually appraised

Prepare and present vehicles in the best possible condition

Value each vehicle accurately and set a reserve that reflects condition, history, mileage, specification and current market conditions

Ensure V5s, MOTs, service histories, spare keys, including master key where relevant, are present at the time of sale

Manage and take action on all unsold stock before it becomes over-aged incurring additional re-cleaning, transportation and storage costs

David Scarborough, Managing Director, Chelmsford Car Auctions, and chairman of the SMA, added: ‘We have experienced some quiet weeks at auctions in August but the expectations for September are positive. Assuming this is the case then we will see some re-aligning and likely reduction of vehicle values due to the volume increase.’

This increase should continue into early November, from which point the market does get harder. Sellers will need to be focused on the desirability, as well as condition of their product and price accordingly in order to maintain the high conversion rates that they have enjoyed previously.’