June’s used car values are continuing to rise, but in smaller increments, according to BCA’s latest Pulse report.
June saw average auction values increase for the eighth month running, by £77 to £5,850, compared to £5,773 in May.
Year-on-year values are now £735 or 14.3% ahead of June 2008 – reflecting both that values were under severe pressure this time last year, and that 2009 has seen sustained and significant improvements in value.
June 2009 performance against CAP is nearly eight points higher at 99.93% than that recorded in the same month in 2008.
According to BCA’s figures, in June average values for fleet and lease cars rose by £28 while average part-exchange values climbed by £45 and nearly-new values improved by a substantial £1,690 – although this was largely due to a spike in the volume of premium cars sold in this sector during the month.
Fleet and lease
Splitting fleet and lease vehicles into volume, premium and budget sectors underlines that there were some variances in demand during June.
Volume fleet and lease product performed strongly, with £120 (2.3%) being added to the average value in June. Values have improved by £1,247 this year, equivalent to a 31% increase in six months. Year-on-year values are ahead by £741, reflecting that this time last year; values were beginning to fall quite rapidly.
Performance against CAP Clean for volume fleet & lease cars rose for the second month running to 98.16%.
There was a small monthly rise in the values of Premium fleet product in June by just £49 to £10,411, while fleet & lease Budget values fell by just £20 to £3,325 (just over half a percent).
With demand for affordable transport staying high, values have increased in the part-exchange sector for seven consecutive months. The average price improved by £45 (matching the increase recorded in May) to rise to £2,405. CAP performance improved by two points to 95.48%. Year-on-year values are ahead for the second month running, by around £250.
June saw another substantial increase in nearly-new values, with the average price rising by £1,690 against May to reach £16,382 – the highest recorded in a year. Much of this was down to model mix, with premium models selling in greater relative numbers than had been seen in May.
Year-on-year values are now ahead by £2,220 having been behind by a similar amount last month. Performance against CAP Clean improved by two points to 104.21%.
However, average values for nearly-new Budget cars fell by £726 against May to £5,655, the second consecutive monthly fall in values. Numbers are very low in this sub-sector, so swings in age, mileage and price are inevitable and are driven by mix rather than by market trends.
Tony Gannon, BCA’s communications director, said: “The current supply and demand equation is keeping prices high.
Stock levels remain relatively low, and certainly behind normal levels for the current period in previous years.
“Consumer demand remains firm and with the vast majority of vehicles on offer being sold, conversion rates remain exceptionally high and values reflect this.
“CAP values were largely unchanged in June, but prices rose and percentages improved. Bearing in mind the strict criteria for CAP Clean, it is clear that current demand is resulting in average condition cars being bid to Clean values and above. Unsurprisingly, 2009 continues to ‘outperform’ 2008 by a considerable margin.”
BCA also reports on the longer-term quarterly movements, and shows that Q2 2009 established a new record average value of £5,785 – beating the previous highest of £5,722 in Q1 of 2008 by £63.
Year-on-year, Q2 09 is some £450 ahead of last year and performance vs CAP Clean has made a significant recovery in 2009, averaging 99.9% in the first half of the year, compared to 94.5% for the same period in 2008 and just 92.6% across the whole of 2008.
Gannon said: “Looking at price evolution over a longer period shows that average used prices have staged a solid recovery following the significant falls of last year.
"It is the first time on record that Q2 average values have made a substantial improvement over Q1 values reflecting the longer term nature of the recovery from a low base.”