With an acceleration of the changing mix of vehicles reaching the remarketing sector, average used car values remained fluid over the summer months, according to data by BCA UK.
After an initial positive first quarter earlier in the year, average values have now declined for three consecutive months, with August values at BCA averaging £7,669, down by £195 (2.5%) from the £7,864 recorded in July. The pace of decline has slowed however, as July was down on June’s average value of £8,255 by £571 (6.9%).
Despite the moving market, demand has remained reasonably consistent, and sold used car volumes at BCA in August rose to the highest point since March of this year.
The shortage of desirable 3 to 4-year-old product continues to be a significant factor impacting mix and as a result competition remains strong for the best examples.
BCA UK COO Stuart Pearson commented “Buyer feedback suggests that the retail landscape remains challenging and often inconsistent, not untypical at this time of year, but no doubt exacerbated by the continuing tough economic conditions generally. As a result, it is therefore no surprise that tactical campaigns to stimulate footfall can apply pressure within the wholesale market and therefore we’ve seen prices moving”.
“The well documented shortage of three to four-year-old product continues to drive a significant focus on the best graded stock that can be retailed quickly, with many of these vehicles reaching values well in excess of expectations. Conversely, the poorer graded vehicles have needed very close pricing attention with a clear focus on the remarketing basics required to find them a new home the first time they are offered for sale.”
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Pearson added “Talking to our customers, margin remains under pressure as the market continues to move and skilled labour and parts supply remain hot-topics. However, many are well placed to absorb any upturn in retail after exercising rigorous controls on inventory management.”
Pearson closed “All things considered, the market feels like it is in reasonably good shape to manoeuvre through the forthcoming months. Stock levels are lifting and there is an optimism that consumers will become more engaged as inflation falls. The trade is well practiced at reacting quickly when they sense opportunity and, with some signs of improvement in the broader economy, this could be just around the corner.”