BCA’s latest Pulse report shows that average used car values increased in December, following three months where values have fallen.
Much of this was due to a change in model mix that saw a greater percentage of higher value nearly-new cars sold, combined with a seasonally stronger market in the run-up to Christmas.
The overall average value for cars sold in December was £6,188 – an increase of £285 (4.8%) compared to November’s figure of £5,903. CAP comparison values also improved to 96.11% from the 94.45% recorded in November.
Values remain well ahead year-on-year by £1,352 (a significant 27.9% increase), although as prices were beginning their recovery 12 months ago, it is likely that this figure will reduce in the months ahead.
Despite the overall increase, average values actually fell in two of the three main product sectors – fleet & lease values fell by £134 to £7,025 (down 1.9%) and part-exchange values fell by exactly £100 to £2,549 (down 3.7%). Nearly-new values increased by £930 to £17,899 (up 5.4%) – largely due to a shift in model mix towards higher value premium models that will have had an effect.
Tony Gannon, BCA’s communications director, said: “December often sees a surge in prices as professional dealers acquire stock in readiness for the New Year.
“Supplies of fleet/lease and part-ex cars available in December were down broadly in line with the reduced trading period, although the numbers of nearly new cars remained fairly static, month-on-month.
“This changing mix of higher value cars in an active market saw average prices rise for the first time since August. However, average values in the bigger volume fleet and part-exchange sectors continued to decline.”
Looking ahead to January, Gannon said dealers can expect a further uplift in activity but the sustained price rises of 2009 are unlikely to be repeated this year.
Gannon said: “The market had fallen so far and needed to recover. A year later we are not in the same position and the recovery has taken place.
“However, there are suggestions that the late winter and early spring months could bring further stock shortages, which tends to suggest values could rise in Q1 as a whole - providing the demand is there.
“If the economy continues to recover, that will give consumers the confidence to change their car. There is a view that we are on an upward curve, but it looks to be very gradual and protracted. However, it is at least progress and some of the benefits will be felt in the retail used car market, which should be good news in the wholesale remarketing sector.”