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Manheim's used market bulletin: February 2007

Manheim has launched a new market bulletin designed to bring commentary on the used car market for the previous month.

It covers the main price movements in the fleet and dealer sectors and also breaks down the market performance by vehicle segment and fuel type.

This first report looks at February 2007 and compares it to January 2007 as well contrasting the performance to the corresponding month in 2006.

Dealer part-exchange overview
February’s market in the dealer sector has seen continued price stability with volumes of part exchanges at similar levels to January 07 but up by over 20% compared with Feb 06, This reinforces dealers’ increased commitment to used cars, against a background of falling new car sales last year.

In February 2007, only 20% of dealer’s part-exchange stock were diesel derivatives but figures suggest this is likely to change dramatically over the next few years. Younger stock coming to market from the fleet market now comprises nearly 40% diesel content and this is commensurate with current new car registrations. Manheim does not believe this will be an issue in terms of demand but says that dealers will need to adjust to this changing dynamic.

Interestingly, the report breaks down the types of part-exchanges into the main vehicle segments and details the performance of each one. In % share terms they rank as follows – Medium Family 31%, Small Hatchback 30%, Large Family 19%, Compact Executive 6%, with Supermini and 4x4 both on 4% and Executive and MPV models both at 3%.

The best performing segment was 4x4 which at 85 months and 76k miles returned a healthy average of 22% of original cost new. Compact Executive models were very close behind at 21% with 83 months and 80K miles. Superminis, not surprisingly, also performed well but at younger age (78 mths) and much lower mileage (49K) returning 22% of cost new.

In overall terms the February market for dealer part exchanges changed little from the very buoyant start in January:

Average sale price in Feb 07 was £2,214 against £2,260 in January 07
Average mileage was 73,348 in Feb 07 against 72,574 in January 07
Average age in Feb 07 was 91 months against 90 months in Feb 06
The average % against original cost new price in Feb 07 was 16%, the same as in January 07.
Stocking days dropped in February from 5 to 4 days, the lowest in the industry.

Petrol v Diesel
Average price of petrol cars in Feb 07 was £1,963 compared with £2,054 in Feb 06. This equated to 15% of Cost New price, the identical figure in Feb 06.

The average price of diesel cars in Feb 07 was £3,558 (19% of Cost New), £93 more than in Feb 06 (19% of Cost New).

Diesel cars are worth 4% more of their Cost New than petrol cars in Feb 2007 % of Cost New of used diesels are highest in the Compact Executive, Executive, MPV and 4x4 sectors (26%, 26%, 23% and 28%) while petrol residuals remain strongest in the Supermini sector (22%)

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