Used car book values for July fell by 1%, reports VRA Remarketing today, adding that trade values have been marked down by up to 3% in the past two years.

This follows a British Car Auctions release earlier this month reporting that used car values dropped 2.2% in June compared to May.

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VRA says the market still shows signs of smaller cars achieving the best profit margins, as used car buyers continue to downsize their motoring requirements to reduce running costs.

This means five-door cars are now widely sought at the smaller end of the market, due to their increased practicality and are, for the first time, commanding a price premium over three-door models. Petrol remains the engine of choice at this end of the market.

Colour clash

Trade buyers are becoming choosier about what they bid for and buy. Less desirable cars in the ‘wrong’ colours are now very difficult to sell, and adjusting the reserve price may be the only way to shift them quickly.

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Buyers are also increasingly looking for cars that are ready to retail, so more vendors are investing in refurbishment prior to sale. This means the majority of cars are better refurbished, leading to higher prices and first-time conversion rates.

VRA predicts the London Olympics will keep demand for hire cars strong during the summer with more visitors entering the UK. Therefore fewer cars are being defleeted and sometimes remain on the fleet for two to three years. Currently this works well for the industry as there is a general shortage of two-year-old cars in the marketplace, so when these vehicles are defleeted, they tend to achieve good prices.

The traditional 6-12 month nearly-new used car market continues to suffer severe pressure from aggressive new car deals from manufacturers and their dealers. Consumers are now looking at new, rather than nearly-new cars, leading to lower prices, which are likely to remain under pressure in the short term.

13 may be unlucky for some dealers

VRA also reveals the DVLA is proposing to help superstitious motorists who want to buy a new car in March 2013, but would prefer to avoid the unlucky number 13.

Motorists who buy a new car registered from 1 March 2013 to 31 August 2013 can choose to have it registered as a 62-plate, effectively keeping it the same as vehicles registered from 1 September 2012 to 28 February 2013, until it naturally reverts back to the regular plate pattern, which will see the 63 registration appear on 1 September 2013.

Great for those who regard 13 as unlucky, but problematical for the used car market, according to a VRA spokesperson, who said: “Those picking up on the anomaly will value the car correctly, but those who don’t may offer drivers considerably less for the car than it is worth just based on the registration plate. Something for the used market to consider in spring next year.”