June marked the first decline in used car values, after three consecutive months of increase, according to the British Car Association (BCA) Pulse report released last week.
The average value for used vehicles slipped from May’s record of £7,597 to £7,476 in June, but last month still maintained a 6.8% (£476) increase on year-on-year figures.
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Over the past twelve months average age increased by one month, while average mileage fell by around 1,000 miles. Meanwhile, CAP Clean performance rose by over one percentage point in the same period, improving by half a point to 95.66% in June compared to May.
Within the fleet and lease sector, average values declined for the second consecutive month by 0.9% to £9,448 in June, a fall of £89 or compared to May.
The dealer part-exchange sector saw values fall by 1.8% (£75) to £3,973 in June, marking a break with the previous three consecutive record months. Year-on-year, values remained higher by 7.6% (£281), age continued to rise and mileage fell.
Simon Henstock, director of UK operations for BCA, said: "The summer months typically see some pressure exerted on average values and 2014 is following the pattern we have seen in previous years.
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By GlobalData"In many ways, the marketplace has not shifted significantly from last month as we remain short of good retail-quality stock, and supply and demand is reasonably well balanced, with conversion rates remaining relatively stable," he added.
Henstock also said the increasing number of customers choosing to buy vehicles via BCA Live Online, the company’s service offering live webcasts of its physical auctions, meant that cars sporting the best "ready-to-retail" condition were likely to return values "well in excess" of guide price expectations.
Indeed, nearly new vehicle values fell 2.8% (£604), after three consecutive months of growth. According to BCA’s report, volumes remain "very low" and the predominant price factor continues to be determined by model mix. In the nearly new sector, CAP Clean performance dropped by half a point to 100.27%.
"However," he warned, "vendors should beware of expecting a similar return for vehicles in poor or below average condition.
"There is little to be gained by placing over-aspirational reserve prices on poor condition cars if the market is not prepared to meet those expectations. These vehicles need to be sold eventually and simply delaying the inevitable can cost more in the long term."
