Working in the remarketing industry you swiftly
learn that making predictions about used car values is fraught with
danger. Very few people foresaw the huge levels of demand the
industry experienced from the very start of this year, for
example.
In fact, 2009 has seen average values recover
strongly, thanks to a good balance between supply and demand. BCA
recorded nine straight months of incremental price growth, dating
back to November last year when the first faint stirrings of a
recovery started to show.
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Yet in September 2009, we reported a very slight
downturn in average used car values. While we warn against drawing
too many conclusions based on one month’s data, there are some
other trends beginning to emerge.
Our own data shows that there was a marked shift
in the market that took place in mid-September. Average values for
the two weeks commencing 21 and 28 September fell sharply but
weekly fluctuations are not uncommon and so this two-week period
should be viewed with caution.
However, of greater significance is the fact the
supply of used cars increased dramatically with BCA stock
increasing in the month by over 20 percent – the first notable
increase this year.
If volumes continue to increase from corporate
and dealer sources, we could be seeing the current peak of market
values – and it could be that values settle a little between now
and Christmas. After all, September values traditionally represent
the peak in the annual price cycle.
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By GlobalDataIndeed, the other factor that has affected prices
was a slight softening in retail demand with dealers reporting a
reduction in footfall and used vehicle transactions, as motorists
hesitated over the higher prices for potential purchases. These
factors have combined to take some of the heat out of the
market.
Looking ahead into early 2010, we have to take
the following issues into account. If volumes into the remarketing
arena rise significantly it will impact on price – simple supply
and demand will see to that. If the economy continues to recover,
that will give consumers the confidence to change their car. Signs
appear good, but there is still a long way to go.
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
motor industry, which should be good news in the wholesale
remarketing sector. In addition, the new car market has received a
boost with the extension of the scrappage scheme, which all helps
to generate churn.
Of course, one of the big unknowns for 2010 is
the general election. Whatever the result, there will be an
economic impact.
Tony Gannon, communications
director, BCA
|
1 year old |
2 year old |
3 year old |
||||
|
Sep 09 (£) |
Oct 09 (£) |
Sep 09 (£) |
Oct 09 (£) |
Sep 09 (£) |
Oct 09 (£) |
|
|
Ford: New Focus 1.6 Zetec |
8,750 |
8,000 |
7,000 |
6,500 |
4,750 |
4,300 |
|
Mondeo 1.6 Zetec/1.8 LX 5dr A/C |
10,000 |
9,500 |
7,500 |
7,000 |
3,750 |
3,600 |
|
Galaxy 2.0 Zetec |
12,750 |
12,000 |
10,000 |
9,500 |
7,600 |
7,400 |
|
Land |
26,500 |
26,000 |
21,750 |
21,200 |
18,000 |
17,500 |
|
Vauxhall: Corsa 1.2I Design |
7,000 |
6,400 |
5,400 |
5,000 |
4,250 |
4,000 |
|
Astra 1.6 Club 5dr |
7,400 |
6,800 |
6,000 |
5,600 |
4,400 |
4,000 |
|
Vectra 1.8 Design |
7,800 |
7,400 |
6,000 |
5,750 |
4,500 |
4,300 |
|
Citreön: C5 2.0 HDI Estate |
7,600 |
7,000 |
6,000 |
5,600 |
4,750 |
4,500 |
|
Peugeot: 307 1.6 S A/C |
6,600 |
6,000 |
5,300 |
5,000 |
4,000 |
3,750 |
|
407 1.8S Multimedia/407 S 1.8 |
6,800 |
6,500 |
5,400 |
5,000 |
3,800 |
3,500 |
|
BMW: New 325 SE Auto |
18,000 |
17,200 |
14,000 |
13,400 |
11,500 |
11,000 |
|
Mercedes: C200K Elegance |
17,500 |
16,500 |
14,000 |
13,200 |
9,750 |
9,200 |
|
Audi: A4 2.0 SE |
13,400 |
13,000 |
10,500 |
10,250 |
8,000 |
7,750 |
|
Source: BCA |
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