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Stock shortages begin to bite as prices rise in August

Reduced supply in August has resulted in a price bounce, according to BCA’s latest Pulse report.

The figures show that, on average, values increased by more than £250, with fleet/lease and nearly-new stock showing substantial month-on-month rises.

Demand for older, lower value dealer part-exchange cars was broadly flat, with just a £2 difference recorded from July.

Values across the board improved to £5,888 from the £5,633 recorded in July – a £255 increase, equivalent to a 4.5% rise.

Year-on-year, August 2011 is marginally behind 2010, with a £17 difference. Compared to two years ago – when the market was accelerating rapidly - 2011 is £345 or 5.5% behind.

Given a general shortage of stock during August, conversion rates also improved as professional buyers were active, with many buying early to offset the expected rises in demand for the best retail quality stock that are traditionally seen in September.

It is the third year running that August has seen average values improve over July. Performance against CAP Clean improved by around half a point to 96.1%.

BCA communications director Tony Gannon said “While August has been a welcome fillip for vendors, the longer-term prospects suggest that volumes will rise from mid-
September onwards.

"This traditionally exerts pressure on average values and conversion rates and that could be even more pronounced this year.”

“While there has been some softening of market conditions over the summer – as would be expected – vendors have been shielded from any real price pressure by the low stock levels.

Demand for the limited supply has been just sufficient to keep the market balanced and healthy conversions have been achieved.

However, as volumes rise significantly following the plate change, there is no indication that demand will increase at a similar rate.”

model mix will have been largely responsible for the changes in this sector as volumes are so low.

Performance against CAP Clean fell by 1.5 points to 99.5%.

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