The used car market remained buoyant throughout 2006 according to Manheim Auctions’ latest Market Analysis used car report.
Used car stability continued into the last quarter of 2006 against a particularly strong wholesale market from June through to September 2006.
Volumes in Q4 2006 fell in line with seasonal expectations, but were still a good way above the level seen in the same period in 2005.
As demand continued across the market in Q4, certain sectors that rely heavily on the used car market breathed a sigh of contentment. Overall average values in Q4 remained at the highest level seen, hovering just under £6,200 (up £588 on the same period in 2005), whilst the % retained against Cost New remained extremely strong at 39.7% (up 3.2% v Q4 2005).
The biggest influence on values is always age and mileage but these remained virtually unchanged in Q4, averaging 39 months and 51,000 miles respectively, confirming the true buoyancy of the market in this period.
All of this was achieved on the back of new car sales ending 3.9% down on the previous year.
The Fleet market performed well during Q4 at a time when sector prices can often soften.
Small decreases in age (- 1 mth to 43.9 months ) & miles (- 900 to 58,131 miles)
Original cost new price unchanged at £15,500
Sales price up £130 to £5298 (+ 2.5%)
Percentage retained of cost new up to 34.1% (+ 0.75%)
Stocking days down 2 to 14 days
This sector is usually most vulnerable to price drops at the back end of the year. In Q4 reductions were minimal and underlined the strength in the nearly-new market against the backdrop of poor new car sales.
Small decrease in age (down 1 to 12.7 months) & miles (down 1,000 to 14,821)
Original cost new price unchanged at £17,700
Sales price down by £140 to £11,274 (- 1.25%)
Percentage retained of cost new down to 63.5% (- 0.8%)
Stocking days up 1 to 9 days
Given the relatively low value of vehicles, this sector is the least likely to be materially affected in Q4. Part-exchanges from retail activity continued to see strong demand and prices actually went up.
Age and mileage unchanged at 86.6 months & 71,000 miles respectively
Original cost new price unchanged at £14,100
Sales price up £88 to £2,444 (+ 3.7%)
Percentage retained of cost new up to 17.3% (+ 0.5%)
Stock days down by 1 to 4 days
The following summarises the main movements across the key vehicle segments in Q4 2006.
Age:No notable changes in any segment
Mileage:Most segments remained unchanged however noticeable increase in Executive segment – up 5K to 69K miles, with smaller increase in MPV segment – up 2K to 50K miles
Highest mileages are Executive models covering 69K at 43 months
Lowest mileages are Superminis covering 22K at 33 months
Selling price:Superminis down £98 (-2.4%) but still strong at £4,000
Small Hatchbacks up £170 (+ 4%) to £4,515
Med Family down by £125 (-2.1%) to £5,596
Large Family up by £125 (+2.3%) to £5,439
Compact Execs up £300 (3.4%) to £9,019
Executives down by nearly £500 (-4.5%) to £10,601
MPVs down by £360 (-5%) to £6,469
4x4s down by £360 (-3.25%) to £10,849
Percentage retained of cost newSmall Hatchback and Compact Exec are both up by 1%
Executive, MPV and 4x4 segments are all down by 1%
Top performers are Supermini (47%) and Small Hatchback (45%), but both younger with lower mileage
Worst performing segment continues to be Large Family at 32% (41 months / 66K miles)
Strongest performers for age/mileage are Compact Executives at 41% (42months / 65K miles) and 4x4 segment (44 months / 46K miles)