Observations, Tim Naylor, BCA
Average values continue at near record levels, despite the background economic conditions remaining difficult and consumer confidence being fragile. As in previous months, prices are high largely as a result of the constricted supply and, seasonal variations aside, we should expect a similar picture across much of 2013.
Across the board, used cars averaged £7,000 last month, down by £56 compared to February but significantly ahead of March 2012 by £1,026 (17.1%). March 2013 recorded the fourth-highest average monthly value since reporting began in 2005. Fleet and lease values fell back slightly from the record levels achieved in February, while dealer part exchange values climbed marginally.
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However, post-Easter, buyer demand has weakened and conversion rates have fallen in the first week of April, suggesting there will be some pressure on values in the weeks ahead. There was a notable reluctance for trade buyers to bid as strongly on poorly presented vehicles and cars requiring any significant degree of cosmetic work were hit the hardest. In contrast, values for well-presented retail-quality vehicles continue at often exceptional levels, outperforming price guide expectations by a considerable margin.
In the post-Easter period, we expect the dynamics of the wholesale markets to change. Typically this time of year brings a softening in demand combined with an upswing in supply, so BCA expects to see continuing pressure on values and conversion rates in the weeks ahead.
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