BCA has reported that used car values dropped in May by 2.5%, while still remaining close to record highs.
Average values remained at near record levels in May as professional buyers continued to bid strongly on a wide range of stock. However, with high volumes of stock continuing to reach the wholesale sector and a slight change in mix that saw greater numbers of dealer part exchange cars reaching the market in May, the headline figure fell for the first time since December.
Average values for fleet and lease stock and dealer part-exchange vehicles at BCA were down marginally month on month, while values for nearly-new cars rose slightly.
At £8,861, the headline figure in May fell by £229 (2.5%) from the record value of £9,090 achieved in April. Year-on-year, average values rose by exactly £600 (7.2%) – a result of ongoing steady levels of demand and BCA offering a richer mix of stock with a lower age and mileage profile.
BCA’s UK chief operating officer remarketing Simon Henstock (pictured) said: “May generally saw a very similar price performance across the board to April, with comparable conditions holding sway. Professional buyers remain very selective, often buying to order and focusing their attention very firmly on the ready-to-retail vehicles that can be churned quickly.
“The best presented and specified cars are selling quickly, and may well exceed guide expectations. The budget end of the market is relatively strong, providing the condition is good and vehicles are sensibly appraised and valued.
“As we said last month, we are seeing high volumes of stock reaching wholesale channels and this impacts the dynamics of the marketplace. Buyers have plenty of choice and it is critical to price vehicles correctly at the point of sale. Conversion rates will quickly suffer if vehicles are over-valued and we are working closely with our volume vendors to ensure their stock is competitively priced to sell the first time it is offered.”
For the third month running, average values in the fleet and lease sector remained at or near record levels.
This sector saw values average £10,446 in May, a small month-on-month fall of just £27 from April’s highpoint. Retained value against original manufacturers' retail price (MRP) fell slightly to 42.63%, while year-on-year values were up by £540 (5.4%), as both age and mileage continued to decline.
There was a similar small fall in the dealer part-exchange sector, where values averaged £4,658 in May, down just £18 on April’s record figure of £4,676. Longer-term values have been relatively stable, with year-on-year values ahead by £168 (3.7%), with average age and mileage little changed over the period.
Values for nearly-new vehicle values rose by £318 in May to £18,346, equivalent to a 1.7% increase. Model mix has a significant effect in this low volume sector.