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Falling values may indicate long period of price pressure

BCA’s April Pulse report shows that average used car values fell, while sold volumes also declined and conversions fell dramatically.

Values across the board fell 2.2% to £5,626, a £126 drop. It is the lowest monthly average value recorded since March 2009. Year-on-year, April 2011 is £245 (4.1%) behind the same month in 2010.

Sold volumes fell by a significant 19.8% compared to March, with the multiple bank holidays at the back end of the month having an obvious effect on trading activity.

Performance against CAP Clean dropped sharply from the 95.9% achieved across the board in March to 92.8%.

Looking in greater detail at the weekly average value figures in April shows that pressure grew during the month. In week 14, values averaged more than £6,000 across the board at BCA; by week 17 – the week of the royal wedding – values had tumbled to £4,950.

Over the same period, average CAP performance fell from 95.8% in week 14 down to 89.8% in week 17.

BCA’s communications director Tony Gannon said: “This might be the precursor to a sustained period of price pressure such as that experienced in 2008.

“However, our view is that the market is more robust and leaner than it was three years ago, and the volumes available for remarketing are lower.”

Fleet values fell by 1.7% to £7,413, with sold volumes down by 19% from March.

The critical issue for the fleet sector is the falling conversion rates, which generate increasing numbers of re-entries. Year-on-year values are behind by £458.

In the part-exchange sector, values fell by 4.3% to £2,668, the third consecutive monthly fall.

Despite this, year-on-year figures are ahead by £76 (2.9%).

The nearly-new sector saw values improve by 2.4% to £19,619.





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