Car values continue to strengthen with prices
rising by 0.6 percent across the market, Manheim Remarketing
reported this week.

Dealer part exchange car values rose by 3
percent between April and May, while manufacturer stock rose in
value by 1.6 percent. Average values are nearly 9 percent higher
now than they were a year ago, the auction house reported.

Manheim attributed this growth in part to the
fact that demand in the dealer parte exchange market has been
“maintained”.

This growth, however, was partly offset by a
0.6 percent decline in wholesale values in the fleet sector.

The decrease in fleet values was less than
expected given the significant fall in conversion rates during May,
according to Mike Pilkington, managing director of Manheim
Remarketing.

He said: “The reduction in demand will
inevitably result in lower prices and vendors need to react to the
realities of the present marketplace.”

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By GlobalData

The increase in manufacturer values are “an
anomaly arising from changes in mix”, Pilkington added, while
dealer value rises “indicate that demand has been maintained in the
sector where traditionally values are the last to be impacted by
any market changes”.

Average age of cars is up by four months
compared to May 2009, at 50 months, and average mileage is higher
by 3,015 miles at 49,777 miles, reflecting extended use during the
recession, Manheim said.

Meanwhile, seasonal softening of demand in the
UK has resulted in a slight drop in average wholesale used van
prices, despite an annual overall increase taking place in
commercial vehicle registrations.

Manheim Remarketing last month reported that
the average price of used vans dipped between April and May by 2.8
percent, an equivalent of £126, to £4,290.

A combination of tough market conditions,
rising volumes “and the re-emergence of the traditional softening
of demand at this time of year” has resulted in the first decrease
in average values for nine months, according to James Davis,
general manager of commercial vehicles at Manheim Auctions.

Prices are expected to continue falling “given
the time of year and increase in supply”, Davis added.

The Society of Motor Manufacturers and Traders
(SMMT), meanwhile, reported that UK commercial vehicle
registrations rose YoY by 25 percent in May 2010.

Van registrations during this period rose by
32 percent to 17,025 units, the SMMT said, although truck
registrations fell by 7.5 percent in May.

According to Manheim, the car van sector saw
prices drop 8.5 percent, the sharpest fall in the van sector,
followed by small panel vans, in which prices dropped by 2.4
percent.

Prices of used large panel vans of less than 3
tons, meanwhile, dropped by just 0.8 percent, although for
equivalent types of vans weighing less than 3 tons prices dropped
by as much as 7.9 percent. 

Manheim reported seeing an increase in the
volumes of vans entering the market, largely due to the
implementation of several major daily rental fleet replacement
programmes.