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CAP criticised for 'driving,not reflecting the market'

Auction4Cars has accused CAP of having a detrimental effect on used car prices by driving the market instead of reflecting it.

A division of Motorpoint, Auction4Cars sells the company’s part-exchange vehicles exclusively to the trade.

However, it claims it is experiencing a shortfall between what it pays for its part-exchange vehicles and what it is then able to sell them on for because of CAP’s valuations.

Figures for April from the car auction website reveal values have fallen to an average of £2,977, equivalent to a 4% drop.

But it said valuations set by CAP remain too high, making it difficult for auctions to achieve book values on many models.

“Although it is seasonal for prices to slow at this time of year, the prices being set by CAP certainly aren’t helping,” said Neil Prescott, group disposals manager at Motorpoint.

“We would call on them to review their valuations at the earliest opportunity to bring them in line with market trends.”

But Barry Watts, group operations director at Aston Barclay, said: “It is always easy to blame someone else. Everybody forgets that these publications are only a guide – they are not a bible.

“They are also not a futures publication; they simply take a view on the information and data they have acquired from various areas of the motor industry over the previous month.”

CAP says it constantly reviews prices to ensure market trends are consistently reflected. “Our responsibility to reflect rather than influence or drive the market is a principle at the heart of our pricing processes,” explained Mike Hind, communications manager at CAP.

“We therefore refute any suggestion that CAP has a detrimental – or indeed positive – impact on market values. Our job is to mirror rather than drive used car pricing movements.”

Hind added: “We are always interested in reviewing additional evidence from the marketplace and strongly encourage anyone who believes they can assist our research to speak with CAP directly.”

The country’s two biggest auction companies, BCA and Manheim, both declined to comment. 

CAP comment:

"Mr Prescott does make valid comments insofar as the market tends to focus only on the ‘CAP Clean’ value, even in relation to cars which do not meet the CAP Clean criteria.

There is a major issue in the current market around condition, with a mass of evidence indicating that a large proportion of the cars available do not meet that criteria at present.

There has also been a shift among buyers who until relatively recently were prepared to pay clean prices for cars which in truth needed investment in reconditioning, thanks to the shortage of supply.

Now they are more rigorously taking into account such costs because supply is more plentiful.

Therefore, by definition, average market values are inevitably failing to reach CAP Clean.

As Mr Prescott also acknowledges, there does tend to be an element of ‘lag’ in a monthly guide when the market is moving quickly, so that the book can be overtaken by events.

Indeed our analysis of the first week in June indicates that prices have continued to fall steadily since publication of the latest edition of Black Book.

However, it should be understood that if Black Book was to publish even lower anticipated values, based on expectations rather than current information, then CAP would be rightly held to account for damaging confidence or leading the market.

CAP is always adjusting values based on hard evidence from the market along with expert feedback from many operators. Indeed, we are having useful discussions with Auction4Cars also, whose feedback is proving invaluable during a time of market instability." 

Mike Hind, communications manager, CAP


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