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Rising volumes and seasonal pressures hit prices

Rising supplies of used cars, combined with seasonal issues and relatively static demand in the wholesale sector, saw October’s average values fall by 4.6%, according to BCA’s Pulse report.

Year-on-year, October 2011 is £171 (2.9%) ahead of the same month in 2010, but is £58 (1%) behind the figure recorded two years ago, when the market was peaking.

BCA’s communications director, Tony Gannon, said: “Market performance is increasingly polarised into good and poor condition cars, and the rising volumes from fleet and lease sources have thrown this into sharp relief over the past five weeks.

“Values remain healthy for grade one and two cars, because there is an ongoing shortage of retail ready stock for professional buyers to take away and put on sale immediately.

"But there is little appetite for cars in grade four or five condition – unless they are realistically valued to sell.”

Fleet values fell back after two consecutive monthly improvements, dropping by £270 (3.5%) compared to September and CAP performance fell by nearly three points to 96.6%. Year-on-year values are adrift by £132 or 1.8%.

Gannon added: “Average values for fleet and lease stock in 2011 have declined for seven out of the 10 months – further proof, if it were needed, that fleet cars are depreciating assets.”

The part-exchange sector saw average values climb for the second month running, although the £17 improvement to £2,764 was marginal.

Year-on-year figures are ahead by £159 (6.1%). Performance against CAP fell from just under 95% to 93.2%.
Average values in the nearly-new sector fell from £20,571 to £19,786, a drop of £785 or 3.8%.

Model mix is largely responsible for the changes in this sector as volumes are so low.

Performance against CAP Clean was almost static at 102.35%.

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