The average selling prices of cars from dealers was down by 2.50% month-on-month in May to £2,731, according to the latest Market Analysis from Manheim.
However, the average price is still up by 12.99% compared to a year ago.
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According to the analysis, the MPV and 4×4 segments saw the steepest declines of the seven groupings to record a drop in price, while the executive, compact executive and supermini segments have seen average selling prices improve since April.
The average selling price of an executive car, in particular, saw a month-on-month gain of 7.28%, rising to £4,939. While the average car gained a month in its age at sale to a dealer, and added 2,177 miles on the clock, the average executive car dropped a month in age and was sold with 2,642 fewer miles covered.
Calm before the flood
Touching on much of the commentary in the used sector of late, Daren Wiseman, valuation services manager at Manheim Auctions, said: "the market continues to be busy, but it has calmed down over the past month".
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By GlobalDataDuring that month, vehicle valuation firm CAP said it expected recent high values for used stock to decline and a period of fluctuating prices to begin, following a period which saw British Car Auctions record five straight months of cars selling for above an average of £7,000 at auction.
Wiseman added one of dealerships’ biggest challenges was the "shortage of good quality used stock in the wholesale market". The point echoed that made in May by the Vehicle Remarketing Association, although the Association added the rise in PCP part-exchange could supply dealers with stock and negate the need to look at the wider second-hand market.
On new stock, however, Wiseman agreed with CAP, in March, and Vauxhall chairman Duncan Aldred, the month before, that the UK was likely to see manufacturers offloading European stock. "This should start to ease the chronic shortage of new cars that has fuelled the phenomenon of used car inflation," said Wiseman.
Given the difficulty to predict filtration to the consumer market, Wiseman said the "stock pool is likely to shrink further over the next six months, making it very difficult to predict retail demand".
richard.brown@timetric.com
