BCA has delivered further evidence of the soaring value of used vehicle stock for car dealers during September as average prices reached the highest level the remarketing specialist has ever recorded.
The monthly BCA Pulse reported said that, as buyer demand “continued apace”, average month-on-month used car values at BCA rose by £184 (1.9%) across the board last month, reaching £9,881 – the highest point recorded since Pulse began publishing.
Year-on-year values rose by £764, an 8.3% rise over the 12-month period.
Earlier this week, the trend of ever-rising wholesale vales prompted Vehicle Remarketing Association chairman Glenn Sturley to express his concerns that prices for good quality used cars had reached a level where it is “almost impossible” for many dealers to make a profit on the windscreen price and they are instead relying on returns from their F&I department.
Sturley said: “I’ve been in the industry since the 1960s and I can recall few moments like this when demand was driving prices so close to retail levels.
“Of course, this is good news if you are disposing of vehicles but bad news if you are buying and it is prompting dealers to shift the emphasis when it comes to realising profits, with many putting a lot more effort into F&I, as well as a push on warranties, service plans and more.”
At BCA’s auctions during September, all sectors saw values increase in September, with fleet/lease product rising by £648 (5.7%) compared to the previous month and an increase of £1,093 or 10.1% over the year, the Pulse report stated.
Both dealer part-exchange and nearly-new values saw more modest rises that continued the pattern of value growth that has been apparent for much of 2018 – average part-exchange values have now risen for eight months in a row.
BCA’s chief operating officer for UK Remarketing, Stuart Pearson, said: “Bidding activity on used cars has been strong at BCA throughout 2018 and that continued into September, pushing average values for fleet and contract hire and dealer part-exchange vehicles to record levels.
“New performance records were set across our UK network and not surprisingly, interest was exceptionally high for vehicles in ready to retail condition.”
He added “The buoyant used car market has continued as we enter October with positive reports around retail activity on used vehicles from our very active buyer base.
“BCA continues to win and retain business and we are delighted that Taggarts, part of the Lookers group have announced a significant remarketing agreement with BCA in Scotland in recent weeks.”
BCA Pulse sector reports
BCA said that its average fleet and lease vehicle values showed particular growth during September, with values climbing by 5.7% to £648 (5.7%) compared to the previous month, to reach record levels for a fifth time in 2018.
The retained value against original MRP (Manufacturers Retail Price) improved by one and a half percentage points to 45.47%.
Year-on-year values improved by a substantial £1,093 or 10.1% over the year, with age rising and mileage falling.
Retailers struggled to realise quite the same growth in their return on part-exchange vehicles, however.
BCA Pulse reported that dealer part-exchange values improved by a lesser 1.3% to £66 to £5,131, albeit the eighth consecutive month of record average values in this sector at BCA.
Year-on-year values were ahead by £374 representing a 7.8% increase over the 12-month period with age and mileage decreasing.
Values for nearly-new vehicles continued to increase, meanwhile, rising by 1.1% (£278) to £25,311 as their rising values generated a sixth consecutive monthly rise at BCA.
Year-on-year values were up by £6,086 – nearly a third (31.6%) ahead of values recorded in September 2017.