BCA’s wholesale used car values declined by 3.8% in November as car buyers’ cost-of-living focus on savings and an evolving stock mix influenced its auction activity.

The average sold price was £8,492 in November 2022 - down £331 month-on-month - as the remarketing giant reported “robust” buyer engagement and a rise in first-time conversion rate to over 80%.

But as BCA reported that the sector’s “one area of weakness” during the month proved to be used electric vehicles (EV), with guide price performance being significantly impacted, its sector rival Aston Barclay reported that the softening of EV values had encouraged car buying activity.

Budget appeal

As reflected in Auto Trader’s latest value depreciation rankings – published by AM today (December 19) – BCA saw values increase at the sub-£4,000 budget end of the market as car buyers look to save money.  

BCA UK chief operating officer Stuart Pearson said: “The cost-of-living crisis, inflation and higher interest rates are likely to be driving the increased activity levels in the budget sector, as motorists needing a used car will be balancing their household budgets with the cost of a replacement vehicle. 

“This change in model mix has naturally impacted the headline average value, however the devil is always in the detail with a number of sectors continuing to perform well, and others starting to be impacted.”

Pearson added: “With more new model electric vehicles entering the market, used values for EVs are really in the spotlight, and therefore it’s not surprising to see some pricing realignment as the cycle of three-year-old product returns. 

“We’ve also been spoilt with a long run of pricing resilience which can make any shift seem more dramatic, so at a time when household budgets are under as much pressure as anyone will remember, we’re working closer than ever to keep our sellers and buyers aligned to keep the market moving.”

Buyers look for EV value

Aston Barclay’s latest Desirability Index indicated that a softening of EV values had encouraged car buyers to invest in EVs for their forecourts.

The Tesla Model 3, which Cap HPI director of valuations Derren Martin flagged up for its high depreciation amid rising new car deliveries in recent months, rose to the top of the pile.

Renault’s Zoe hatchback also appeared in its top 10 most desirable used car buys, while the Nissan LEAF appeared in 9th place and the Peugeot e-208 in 14th.

“Some dealers are investing in used EV stock as prices have fallen by a few thousand pounds on some models,” said Mark Hankey, Aston Barclay’s chief revenue officer.

Hankey added: “Dealers are expecting the used market to bounce back in early 2023 so are investing in stock now while prices are lower. The sweet spot of the used market remains at sub-£10,000 due to the rising cost of living and we expect that to continue during 2023.”