October’s used car wholesale market seemed rather buoyant, continuing the trend of recent months. Many dealers seem to be making good money from remarketing their unwanted part-exchanges, although rising prices for ex-fleet cars means they are forced to give more for forecourt-ready stock.

NEED TO KNOW
♦ Average value increased by £81 per unit to £5,199
♦ Conversion rates fell 3%

NAMA data shows used car sales volumes rose 21% in October and were 9.8% ahead year-on-year, however conversion rates fell 3%. The average price of all stock rose 1.6% to £5,199.

 

Trade-in disposal

The UK’s largest motor auction group, BCA, reported that its average value for dealer part-exchanges in October set another company record for the sixth time this year. Prices averaged £3,760, £80 or 2.1% higher than the September figure. Year-on-year, the average was £689 or 21.8% up, as average age and mileage were both slightly lower.

At Manheim, the average part-exchange value continued to climb in September, reaching £2,898, a £109 or 3.9% increase month-on-month. It coincided with a drop in average mileage to 75,328 from 76,851. Year-on-year, the average value was 3.3% or £91 despite  average stock being two months older and having 1,573 higher mileage.

BCA’s UK operations director Simon Henstock said October was “exceptionally strong” for its auction halls. He added: “With volumes rising, particularly from dealer part-exchange sources, there was some pressure on conversion rates, but strong buyer demand meant that average values continued to rise.”

 

Daren Wiseman, valuations services manager at Manheim Auctions, said: “Demand in the wholesale market remains strong, which has led to the value increase during October. The good quality stock that is being seen is continuing to push up the overall values.

“We are also continuing to see an increase in the volume of stock following the September plate-change, which will affect prices in the short term as the market stabilises between now and 2014.

“The perception that cars are better value at the end of the year may well see more buyers coming to the auctions as they look to collect stock that can be sold at the start of the new year. However, we should see the market tighten and vehicle values realign as we head into 2014.”

Manheim noted that the average value of the UK’s small hatchback segment increased by £183 to £2,192 while the medium family car segment rose £89 to £2,872. Mini-MPVs and coupés were the only segments to record a drop in price.

 

Retail stock acquisition

Ex-fleet vehicles at BCA’s auction halls in October failed to match last month’s record average value, with a drop of £44 or 0.4% to £9,138. Year-on-year the sector recorded an uplift of 9.1% or £762 with an average mileage down by some 3,000 miles.

BCA’s Henstock said: “Fleet cars remain in relatively short supply and there is plenty of competition for any vehicle in ready-to-retail condition.

“While many buyers focus on smaller and more economical cars, demand remains right across the board up to late-plate prestige and luxury marques.”

The seasonal trend is kicking in, said Henstock, with convertibles declining in price while 4x4s are picking up.

Manheim’s Market Analysis for October found the average price for ex-fleet vehicles sold at its auctions reached a £7,724 record high, up £395 month-on-month. Year-on-year the average was £833 ahead, attributed partly to a 3,206 drop in the average mileage.

MPVs saw a notable increase of £1,357 to £8,360; mini-MPVs dropped in value by £396.

Manheim’s Wiseman said: “Typically we would expect to see selling prices of ex-fleet cars soften in October, but the market analysis contradicts this. However, as a word of warning, while the headline figure has been bolstered by a reduction in mileage, the big picture is that the market is set to stabilise over the next few months.

“As we head towards 2014 demand is set to remain high, but there will be a price adjustment across the entire de-fleet sector.”