USED car values bounced back to a record high in July following a dip in June according to BCA’s latest Pulse report. The headline average value of a used car rose from £8,198 in June to £8,341 in July, an increase of £143 (1.7%) and the highest average monthly value on record.
Both fleet/lease and dealer part-exchange values remained at near record levels, while nearly-new values increased. Year-on-year, the headline figure was up by £635, equivalent to an 8.2% increase in average values.
However, model mix had a role to play as higher value ex-fleet stock increased market share over the month. Simon Henstock, BCA chief operating officer UK remarketing, commented: “Supply and demand remain well balanced, with conversion rates improving in July, despite the typical summer slowdown the market experiences once the summer holiday period begins.”
He continued “Sales have been well attended throughout BCA’s 23-strong auction network in July and online bidding has been strong, but it is noticeable that buyers are being more selective about condition, preparation and presentation.
“To maintain desirability and sales performance, vendors can use SMART repairs for those cars that have suffered low level cosmetic damage in the shape of car park dents, stone chips and damage to alloy wheels.
“BCA has also introduced onsite bodyshop facilities to quickly and efficiently repair damaged vehicles, improving their condition grade, making them more desirable to buyers and driving their sale performance and first time conversions.
“Current market conditions make it even more important to ensure vehicles are properly appraised and sensibly reserved. There is little to be gained by over valuing cars, particularly when there is increasing competition for the buyer’s wallet.”
Looking at the average price performance by model shape, values for volume stock generally increased by a small margin, with only coupes and convertibles falling back during the month.
Values in the fleet and lease sector were effectively static in July, down by just £4 at £9,665 compared to £9,669 the previous month. Retained value against original MRP (Manufacturers Retail Price) fell to 41.1% in July from 41.93% in June. Year-on-year values were static, with age falling by one month and mileage down by 3,000.
Average values for dealer part-exchange cars were also flat, down by just £12 over the month at £4,495 – but still the second highest average value on record for dealer PX stock. Year-on-year values were ahead by £217 (5.0%), with age static and mileage declining.
Nearly-new values improved in July to £21,339 from £20,042 in June, although model mix has a significant effect in this low volume sector. Values were slightly ahead year on year.