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Used car values continue to drop

Used car wholesale values continued their fall from September through October, according to the National Association of Motor Auctions.

The average value of all cars was £5,263, a fall of £132 or 2.4% compared to September’s average, which had already fallen 2.2% from the prior month. The average value was only 1% ahead of October 2013.

October’s volumes were up 3.6% on September at 102,707 units but 5% down year on year. First time conversion rates have slipped back to 80% from 84% the prior month. Cars sold on first presentation generated an average premium of £250, a £100 dip on the previous month’s, over those unsold and re-entered.

Paul Hill, NAMA chairman, said: “Used retail activity in October took a significant downturn to the surprise of some retailers despite the warning signs earlier in the month.

"As a direct result of lower retail sales, trade demand is also running at a reduced level. This is significant because it is the first time for a couple of years that vendors have found themselves in what is rapidly becoming a ‘buyers’ market.

“November looks to be as demanding as ever from both a trade and retail perspective. The need for a direct and flexible approach with retail buyers will dictate how badly the trade will be hit in price and unsold volume terms.”

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