BCA reports another strong month for price performance in the used car market with values rising across the board during October. Average values for fleet/lease and part-exchange cars reached record levels, according to the latest Pulse report, while nearly-new values and the overall headline figure were the highest so far this year.
However, BCA also noted that increased volumes and the rising numbers of poor condition cars could impact market performance in the weeks ahead and advised sellers to appraise and value their vehicles in line with market sentiment.
Fleet values rose by £148 (1.5%), with part-exchange values climbing by £67 (1.5%) and nearly-new rising by £1,251 (6.1%). The headline average value improved by £290 (3.7%) as higher value fleet and lease cars represented a higher percentage in October compared to September.
The headline average value of a used car increased to £7,992, despite performance against CAP Clean falling by two percentage points to 96.63%. Year-on-year, average values were up by £244(3.1%), with age static and mileage continuing to fall. Performance against CAP was up by one percentage point compared to 2014.
Year-on-year table: All cars
Simon Henstock BCA’s UK Operations Director commented “Although October’s figures look exceptionally strong, rising average values are not the whole story. Volumes have climbed in recent weeks and while the best presented and most attractive ready-to-retail cars are selling quickly and often for well above guide valuations, there are increasing numbers of poorer quality cars reaching the wholesale markets. These less attractive vehicles need to be accurately appraised and valued in line with market expectations if they are to be sold first time.”
He added “Over valuing poor condition and less attractive cars almost inevitably results in a failure to sell first time, taking longer to sale and the potential for holding costs to rise. When buyers have greater choice they inevitably focus on those cars that represent the best profit opportunity in the shortest timescale.”
“Sellers should be aware of the changing market conditions and work closely with their remarketing partners to ensure their stock is properly prepared, appropriately condition rated and sensibly valued in the weeks ahead. It is worth remembering that there are buyers for every age, mileage and condition of vehicle providing the price is right.”
Fleet & lease car values averaged £9,848 in October, rising by £148 (1.5%), compared to September and reaching the highest point on record since Pulse began reporting. Despite this, retained value against original MRP (Manufacturers Retail Price) was down slightly at 41.80% (from 42.09% last month), with age and mileage broadly static. Compared to October 2014, average fleet & lease values were up by £315 (3.3%), with performance against CAP Clean up by half a point and retained value down slightly on 2014.
Year-on-year table: Fleet & lease
Average values for dealer part-exchange cars also improved over the month, climbing by £67 (1.5%) to £4,401 – the highest monthly average value on record and equivalent to 96.38% of CAP Clean.
Year-on-year values remain ahead by £265 (6.4%), with CAP Clean performance ahead by over two percentage points compared to a year ago.
Year-on-year table: Part-Exchange
Nearly-new values rose by £1,251 (6.1%) compared to September to £21,776, the highest average value recorded this year to date. Model mix has a significant effect in this very low volume sector. CAP Clean performance improved slightly to 101.54%.