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BCA sees prices rising

USED car prices for typical mid-size vehicles have shown a healthy year-on-year increase.

Prices achieved by fleet and lease companies rose in the second quarter by 0.6%. This offsets a 4.1% year-on-year fall in the first quarter.

Average mileage and age have fallen this year, according to the data collected by remarketing giant BCA.

On average, fleet and lease cars sold for 97.4% of CAP Clean in Q1 and 96.4% in Q2. The report also includes details of the state of the motor industry during the first six months of 2005.

BCA reports a slowdown since the new year, with a 5.8% drop in new car sales and a continuing fall in motor finance deals. Although the consumer car finance market fell by 12%, this was partially offset by an 8% growth in the business sector.

The prognosis for the rest of the year is less than positive.

Trevor Finn, chief executive of car dealership Pendragon, said: ‘I can’t see any reason why the second half of this year should be any better than the first or, in fact, why there should be a revival in 2006.’

BCA UK managing director Andrew Hulme said: ‘Our figures show that the market at best is steady, with prices just slightly above where they were a year ago.

‘The strength of the nearly-new market is providing a boost to the price index. However, there is an underlying fragility in confidence across much of the market which cannot be ignored.’

Hulme added: ‘The overriding reason why the current market seems just ‘steady’ is that it is being compared to some exceptional years in recent memory. Both 2002 and 2003 were very strong years for new and used car sales, while 2004 was good despite the market slowing. If used car activity is going to be stronger than new in 2005, used cars will be an even more dominant profit driver going forward.’

  • The data comes from a new series of BCA quarterly reports. For more information, call Tim Naylor at BCA on 01252 878555.
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