Used car prices hold but demand is falling

BCA’s new Pulse data for April shows that average used car values moved very little in the month. Across the board, April values averaged £5,406 - virtually unchanged from March, which recorded an average of £5,400 - on stock that was of a similar age and mileage profile.

However, performance against guide values slipped as CAP valued the same basket of stock £120 higher on average, which resulted in a reduction in CAP percentage from 95.4% to 93.5% (down 1.9 points).

BCA’s Communications Director Tony Gannon commented “Confidence in the used vehicle market remains fragile in the post-Easter period and supply has undoubtedly increased at a time when demand has fallen. While auction values were static in April on stock of comparable age and mileage, CAP values were consistently higher. This suggests either the quality and mix of stock has improved and values achieved did not reflect this upward shift or CAP values - which were set in March – proved to be overly optimistic.”

Gannon added “In reality, prices on well-presented and nicely specified retail-quality cars were maintained in April, but with little else selling, price alone is not telling the full story. Conversions fell noticeably in April and there is now a lot of unsold stock remaining in the market, which is continuing to depreciate. This will inevitably be sold at what the market will realistically pay and that’s when we will see the average selling price reflect the true market condition.”

He continued “We are working closely with our vendors to ensure that everything can be done to maximize the values on the vehicles they are selling, because the best bid achieved when the vehicle is first offered will only rarely be bettered at a later date.”

Gannon added “Trading conditions in May have, if anything, worsened, with demand continuing to decline and conversion rates still under pressure. Anecdotal feedback from our dealer customers suggests that retail buyers are just not around in any great numbers, with many struggling to raise finance for any potential purchase.”

BCA’s Pulse report shows that fleet & lease used car values had some modest growth from £6,619 in March to £6,642 in April, with similar age and mileage profiles. The average increase of £23 was equivalent to around a third of one percent. CAP valued the same stock at £7,031, a rise of £160 over last month, resulting in a fall in the percentage achieved against CAP Clean from 96.3% to 94.4%.

Average values for Volume fleet product fell by £82 against March to £4,768, while CAP values rose by £5, resulting in a fall of 1.7 points against Clean values.

Premium fleet product rose in value compared to March by £162 to £10,257, but CAP values again outstripped this rise, climbing by £397 and meaning CAP percentage performance fell by 2.1 points.

Average part-exchange values fell by £24 (1%) to £2,346, to post a third consecutive monthly fall. Average values are nearly £100 – around 4% - behind those recorded in January. However, CAP values on the same stock rose from £2,644 to £2,698 (an increase of £55) and the CAP percentage fell from 89.6% to 86.9% - a fall of 2.7 points.

Average values for Volume part-exchange cars fell by £77 compared to March, while the CAP percentage fell by 3.4 points. Premium part-exchange cars increased in value by £55 month-on-month, while CAP values rose by £167 resulting in a fall in CAP percentage of 2.0 points.

Nearly-new values were £119 down on March at £14,858, equivalent to a fall of three-quarters of one percent. CAP percentage performance fell by one point from 98.7% to 97.7%, as CAP Clean valued the same stock on average at an additional £53.