AM Online

Used car sales rose 4% in August

August was the second consecutive month of rising conversion rates, meeting the expectations of the National Association of Motor Auctions (NAMA), while the overall average value also increased by £37 per unit to £4,899.

NAMA members sold 92,255 units, up 4% from July. Conversion rates improved more strongly than last month, up to 79% overall and three percentage points ahead year-on-year.

   

  NEED TO KNOW

        
Average value increased by
£37 per unit to £4,899
 
Conversion rates up to 7%, 3ppts ahead of August 2012  
   

NAMA chairman Justin Lane said: “With the September plate-change likely to see a strong set of new car numbers, it should not be forgotten that September is traditionally the second-best used car month of the year. There is a likelihood that dealer stock levels will be in need of replenishment, and with the influx of part-exchanges likely to add interest, conversion rates should remain strong.”

NAMA noted that traditional 4x4s and MPVs have had stable or rising values ahead of the start of the autumn school term and it expects these values to remain buoyant over the next three to four months as the weather turns.

Trade-in disposal

The UK’s largest motor auction group, BCA, reported that its average value for dealer part-exchanges in August fell for the third month running, down to £3,642 after a £48 month-on-month drop. Year-on-year August values were ahead by £691, or 23.4%. The average age of part-exchanges continued to be two months lower than a year ago, at 87.85 months, and mileage was also lower.

At Manheim’s auction rooms, the average part-exchange value for August also dropped, by 2.8% or £74  month-on-month, to £2,629. It reflected a rise of one month in average age. Year-on-year, the average value was up 6.5% or £160, despite average age being two months higher.

BCA’s UK operations director Simon Henstock said: “The short-term prospects suggest that volumes will rise from mid-September onwards and this traditionally exerts some pressure on average values and conversion rates.” He added that poorer-presented vehicles may begin to struggle and will need competitive pricing.

Daren Wiseman, valuations services manager at Manheim Auctions, said: “The fact that part-exchange values remain fairly strong indicates a continued shortage of quality cars coming to auction. How long these market conditions will continue is a bit of a conundrum.

“The latest SMMT figures highlight that there has been a continued rise in the new car market and it is likely to mean that it will not be long before we see significant numbers of new vehicles feeding the starved market.”

Manheim noted that the average value of coupés fell by £333 to £4,602, although this was reflective of age and mileage rises.

Retail stock acquisition

Ex-fleet vehicles at BCA’s auction halls in August set a new record average value of £8,898, a 1.3% or £118 increase over July. Year-on-year, the sector recorded an uplift of 9.1%, or £744, with an average age one month lower.

Henstock said: “Looking ahead to the final quarter of the year, we expect the used market to generate good volumes of business if demand is maintained at the level we have seen throughout 2013 so far.

“Stock availability will remain critical, however. Longer-term economic confidence is the key factor going forward. Recent indicators suggest the economy is improving and this may tempt more retail buyers to consider changing their current vehicle for a newer used car.”

 

Ex-fleet market stable

Manheim’s Market Analysis for August showed the market for ex-fleet vehicles was stable at its sales, with average values falling just 0.7%, or £52, month-on-month to £6,939. Compared with a year before, that average was 6.7% ahead, attributed partly to a two-month drop in the average age.

Supermini cars rose by £396 to a £4,222 average value as average age fell by four months.

Manheim’s Wiseman said the holiday season had played a role in the slight drop of average values as fewer buyers turned out to attend sales in person, although there has been a significant increase in dealer buyers accessing the sales online.

He added: “The likelihood of fewer cars coming off fleet, coupled with the changing consumer demand for new vehicles, has had an impact on the supply of quality second-hand cars at auction. This has meant that although there has been a slight decrease in average values in August, the selling price remains strong.”

If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

Comment as guest


Login  /  Register

Comments

No comments have been made yet.