16 January 2015 - Average values for used cars continue to climb, say BCA
2014 shows 8% rise, year-on-year
Average used car values continue to climb in the wholesale sector according to the latest full year figures from the BCA Pulse report released today.
Across the board, the average value of a used car sold at BCA in 2014 was £7,622, a rise of £566 compared to 2013. It is the highest annual figure on record at BCA. Over the last five years, average values have consistently risen year-on-year, by 1.3% in 2011, 4.7% in 2012, 13.8% in 2013 and 8.0% in 2014.
Average age and mileage have declined for the second year running, reversing the trend that was seen at the start of the decade. Performance against CAP Clean was marginally higher compared to 2013 and was the highest average annual figure recorded in the past five years.
Tracking monthly values (chart below), 2014 clearly outperformed 2013 in every month. Values began to increase significantly from the end of 2012, and numerous record monthly values have been established in the intervening 24 months.
BCA’s UK Operations Director Simon Henstock commented “In terms of the used car market, the relative shortage of stock – a result of low new car sales over several years following the onset of recession – has helped keep values high. However new car volumes have improved notably in 2013 and 2014.”
* 2010 and 2011 volumes include scrappage deals
Henstock added “Demand in the wholesale sector is ultimately driven by the needs of motorists. Rising confidence and the ‘feel-good’ factor is important to consumers and notably more-so when purchasing big-ticket items. An improving jobs market, a stable economy, historically low interest rates and low inflation have given people in work the confidence to make those bigger purchasing decisions and we have seen strong new and used car markets over the past two years.”
Henstock continued “While we have that feel good factor and well balanced supply and demand, we can expect wholesale values to remain relatively strong. However, we may see some changing dynamics on the supply side as rising numbers of nearly-new cars and returning PCP volumes add to the mix of fleet/lease vehicles and dealer part-exchange cars.”
He said “Adding to the interest in 2015, we have a General Election. These are a fact of life and it is impossible to gauge the effect that the ensuing result may have on the wider economy. History tells us there can be some initial uncertainty in the marketplace whoever prevails but this soon settles down and it is business as usual. What might be more worrying is if there is no clear cut decision from the electorate and we end up with a hung parliament.”
He concluded “This means sellers should take nothing for granted and stay close to the market in the months ahead, working closely with their remarketing supplier to ensure their vehicles are properly appraised and valued to reflect both the condition and grade, as well as prepared and presented to a high standard to attract wholesale buyers.”
Average values rose across the board during 2014, with corporate fleet stock, dealer part-exchange cars and nearly new vehicles all showing substantial value increases compared to 2013.
Fleet & Lease values improved by £566 to £9,455, a rise of 6.3%, with age remaining static at just under 40 months and average mileage increasing by around 1,000 miles to 46,700. Performance against CAP Clean fell slightly to average 96.55% across the year. Average sale price compared to original cost new improved slightly to 42.39% in 2014, from 42.13% the previous year.
Dealer Part-Exchange values rose by £309, an 8.3% improvement over values recorded in 2013. Average age at time of sale for dealer part-exchange vehicles increased by a month to 88.5 months, although mileage fell back by 1,000 miles to 71,500. Average performance against CAP Clean improved marginally to 95.5%.
Values in the low volume nearly-new sector rose by £1,248 (6.1%), year-on-year. Make and model have a significant effect in this sector.