Used car price rises mask sector declines, says BCA

Sat, 16 Jan 2010

BCA’s latest Pulse report shows that average used car values increased in December, following three months where values have fallen.  Much of this was due to a change in model mix that saw a greater percentage of higher value nearly-new cars sold, combined with a seasonally stronger market in the run-up to Christmas

The overall average value for cars sold in December was £6,188 – an increase of £185 (3.1%) compared to November’s figure of £5,903.  CAP comparison values also improved to 96.11% from the 94.45% recorded in November. 
 
Values remain well ahead year-on-year by £1,352 (a significant 27.9% increase), although as prices were beginning their recovery 12 months ago, it is likely that this figure will reduce in the months ahead.  

Despite the overall increase, average values actually fell in two of the three main product sectors – Fleet & Lease values fell by £134 to £7,025 (down 1.9%) and Part-Exchange values fell by exactly £100 to £2,549 (down 3.7%).   Nearly-New values increased by £930 to £17,899 (up 5.4%) – largely due to a shift in model mix towards higher value premium models that will have had an effect.

BCA’s Communications Director Tony Gannon commented “December often sees a surge in prices as professional dealers acquire stock in readiness for the New Year.”

He added “Supplies of fleet/lease and part-ex cars available in December were down broadly in line with the reduced trading period, although the numbers of nearly new cars remained fairly static, month-on-month.  This changing mix of higher value cars in an active market saw average prices rise for the first time since August.  However, average values in the bigger volume Fleet and Part-Exchange sectors continued to decline.”

Gannon commented  “Looking to early in the year, January generally brings a further uplift in activity, but sustained prices rises over a number of months - such as those seen in 2009 – are unlikely to be repeated, simply because the market had fallen so far and needed to recover. A year later we are not in the same position and the recovery has taken place.”

“However, there are suggestions that the late Winter and early Spring months could bring further stock shortages, which tends to suggest values could rise in Quarter 1 as a whole - providing the demand is there.”

“If the economy continues to recover, that will give consumers the confidence to change their car. There is a view that we are on an upward curve, but it looks to be very gradual and protracted.  However, it is at least progress and some of the benefits will be felt in the retail used car market, which should be good news in the wholesale remarketing sector.”


                                                                                                                                        
Fleet & Lease Sector - December

Average Fleet & Lease values fell for the third consecutive month, although the fall was not as steep as those seen in October and November.  Values decreased from £7,159 to £7,025, the £134 fall equivalent to 1.9% - compared to the 6.0% fall in November and the 3% fall recorded in October.  Performance against CAP Clean increased by nearly 1.5 points to 95.52%, reversing a four-month decline.

Year-on-year values remain ahead by £1,554 – a similar figure to that recorded last month. 



Fleet & Lease – all data 2008/09

Fleet/Lease

Age

Mileage

Av Sold (£)

Av CAP (£)

Vs CAP (%)

Jan 08

38.94

48046

6726

7005

96.02

Feb 08

39.35

48256

6712

6935

96.78

Mar 08

39.76

47746

6619

6871

96.34

Apr 08

39.50

47424

6642

7031

94.47

May 08

39.49

48772

6428

6906

93.08

Jun 08

39.27

47674

6189

6688

92.53

Jul 08

39.28

48720

5860

6511

90.00

Aug 08

39.11

48076

5786

6408

90.29

Sept 08

39.13

47100

5857

6363

92.05

Oct 08

38.84

48017

5724

6302

90.82

Nov 08

38.46

47289

5596

6292

88.94

Dec 08

38.39

47589

5471

6110

89.54

Jan 09

38.58

47273

5719

5912

96.74

Feb 09

39.02

48122

6286

6059

103.75

Mar 09

39.46

47639

6626

6388

103.71

Apr 09

38.79

46565

6885

7009

98.24

May 09

38.78

46465

7024

7102

98.90

June 09

38.96

47613

7052

7055

99.96

July 09

39.13

48031

7376

7288

101.20

Aug 09

38.99

47620

7575

7550

100.34

Sep 09

39.26

46917

7850

7863

99.84

Oct 09

39.17

48592

7616

7980

95.44

Nov 09

39.01

47191

7159

7609

94.08

Dec 09

38.89

47549

7025

7354

95.52

Fleet & Lease - Volume Sector

Auction values for Volume fleet & lease product fell back for the third consecutive month, with a £174 decrease to £5,279 - equivalent to a 3.2% decline.  Performance against CAP Clean for volume fleet & lease cars improved by a point to 92.72%.

Year-on-year, December 2009 values were £1,324 and around five CAP points ahead of the same month in 2008 – when values reached their nadir.

Fleet & Lease – Premium Sector

Values for Premium fleet product in December fell by just £97, to £10,227, equivalent to a drop of less than 1%. Year-on-year figures remain over £2,000 ahead of those recorded in December 2008.

Performance against CAP Clean improved by nearly two points to 98.28%, and is over seven points ahead of the CAP figure recorded in December 2008.

Fleet & Lease – Budget Sector

With a large fall of 12.7% recorded last month, values for fleet & lease Budget models rallied somewhat in December, still falling but only by £40 (around 1%) from £3,065 to £3,025.   The CAP performance also improved by two points to just under 88%.  Volumes are low in this sector and model mix will have played a significant role.

Part-Exchange Sector - December

Part-Exchange values fell by exactly £100 to £2,549 (down 3.7%) in December.  Values have remained fairly stable in the second half of the year – at or around £2,600, excepting the stronger values recorded in September.  Supply remains limited and demand for budget vehicles remains strong - for plenty of motorists, a six-year-old, 80,000-mile car is an attractive, affordable proposition.  The slow new car retail market means the relative shortage of P/X cars is likely to continue for some time to come.

Nearly-New Sector - December
November saw over £900 added to average nearly-new values, recovering some of the ground lost in November.  The substantial 5.4% increase fall will in part be due to a shift in model mix towards higher value premium models during the month.  The average CAP performance improved by nearly three points to 102.64%.

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