Used car values still under pressure in August

Average used car values fell by nearly £200 to £4,765 during August, according to BCA’s Pulse data. This represented a fall of 3.7% from the £4,949 recorded in July on stock that was of a similar age and mileage profile. It is the second month running that values have been below the £5,000 threshold. Average performance against CAP Clean stabilised at 90% for the second month running.

After falling quite sharply in July by £329 to £5,860, average fleet & lease values fell by a more modest £74 to £5,786 in August in a month with similar age and mileage profiles. The average decrease in August was equivalent to 1.2%, following a 5.3% drop between June and July.

Average part-exchange values fell by £115 (4.9%) to £2,132, the sixth consecutive monthly fall. Average values are now over £300 – around 12% - behind those recorded in January.

Average nearly-new values fell by £1,414 in August compared to July, with CAP performance falling by 1.2 points to 96.1%. With the new registration plate imminent, it is not surprising to see added pressure in the nearly-new sector.

Simon Henstock, BCA’s UK Network Operations Director commented “August is traditionally one of the slower months for used car trading and this combined with the current economic conditions meant we were unlikely to see overall values rising.”

He added “However, it is notable that fleet & lease values fell slower in August than they have since the Spring months and there is increased interest in budget cars, where values stabilised and even began to climb during the summer. Values in this sector have remained comparatively strong, providing further impetus to the notion that motorists are seeking to downsize as economic conditions tighten. Fleet-sourced budget cars have also seen CAP performance rise for two consecutive months, the only part of the fleet & lease sector to do so.”

The Part-Exchange sector also recorded improved performance for budget cars. Following a nominal increase of just £10 between June and July, values for P/X budget cars increased by a more significant £74 (8.6%) in August. This represents the third consecutive month of value growth in this sector after four consecutive months of falls. CAP performance went up by a substantial 4.3 points in August, following a 2.5-point increase in July.

One sector still bearing the brunt of the economic downturn are 4x4 vehicles. Since January, fleet & lease volume 4x4 models have fallen from averaging around 98% to under 85% of CAP Clean, while premium 4x4’s have fallen from a similar highpoint to just under 88% in August. These falls have been more accelerated and larger than has been seen for other fleet & lease stock.

Henstock commented “Some of these bigger, premium 4x4 models are starting to look spectacular value for money now. Guide prices on many bigger engined executive and prestige vehicles are now much more in line with market sentiment and even the price of fuel has fallen in recent weeks. We may well see a niche market developing to serve those ‘weekend’ and leisure motorists who always desired a bigger, more powerful premium model but couldn’t previously afford one. And if your annual mileage is below average, even the fuel costs might not be a deterrent!”