October heralds the typical
slowing in demand for vehicles in the run-up to the Christmas
period.
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BCA’s latest Pulse report
shows average used car values fell back by £146 in October, as the
used market continued to settle into the traditional shape that
would be expected at this time of year. October has heralded the
typical slowing in demand that the market usually experiences in
the run-up to Christmas.
However, the effect has been
tempered this year by the continuing shortage of quality retail
stock.
The average used car value at BCA
fell to £5,792 in October from £5,938 in September, with
performance against CAP Clean falling by over two points to 96.24%.
Values in the fleet and lease sector were hit hardest, falling by
£292 (down 3.8%), with nearly-new values losing a more modest £95 –
a drop equivalent to less than half of one%.
The fall of just under 2.5% could
have been larger due to continuing economic uncertainty and fiscal
pressures affecting ‘big ticket’ transactions. However, supply
issues still affect the market – volumes were down by around 5%
compared to September – and this, combined with decent levels of
demand, is helping to keep values relatively buoyant.
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By GlobalDataProfessional buyers remained active
in October, although levels of demand began to fall off towards the
latter part of the month. The shortage of corporate-entered stock
means conversion rates were generally good for volume vendors. The
budget sector remains very busy and again is short of stock –
competition can be intense for the best-presented models.
At the other end of the scale,
there were some remarkable – albeit isolated – examples of
executive models making exceptionally strong values. In a nutshell,
used cars continue to be the battleground for dealer
profitability.
Up to
one-year-old
While the nearly new sector was
pretty much flat, there were some interesting variances at the body
shape level of detail.
Isolated instances of models making
huge amounts of guide price were noteworthy, but almost certainly
stimulated by export interest. Even so, there were some large
swings last month, even in the bigger volume sectors.
Hatchbacks were in demand, with
small hatches improving by eight points compared to September, and
a 24% increase in average value for large hatchbacks. While some of
the increase in the latter must have been model specific, the CAP
price increase of 11 points suggests this was a fairly broad-based
rise.
The other big-volume sector –
saloons – also increased, with both average price and CAP
performance up by two to three points.
The biggest single month-on-month
rise – 30% – was recorded in Roadsters, but numbers are so small
this was certainly as a result of model mix.
Average MPV values were under
pressure, but a decent CAP performance suggests model mix was also
at play here. Estate values were flat and, while 4×4 values fell
compared to September, the CAP performance was very strong at
108%.
The market for convertibles
declined as would be expected with winter approaching.
One-to-three years
old
Volume values held up very well in
the one-to-three-year-old sector, reflecting the steady demand and
relative shortage of stock.
Saloon values were flat
month-on-month, while hatchbacks, estates and mini-MPVs fell by
around three points. Coupés, 4x4s and large MPVs all outperformed
the previous month, with values improving by up to 6%.
Unsurprisingly, demand for
convertibles and roadsters begins to fall away and values fell by
10 and 14 points respectively.
Performance against CAP was
generally behind book, with values in the high 90s for most volume
sectors, with roadsters and convertibles in the low 90s. Coupés and
4x4s actually outperformed CAP Clean in October.
Three-to-five years
old
Once again, this older age sector
recorded a strong price performance with six sectors showing a
distinct month-on-month improvement.
All saloons, large MPVs and
hatchbacks, coupés and 4x4s all recorded higher average values in
October, with estate values flat. In contrast, values fell back
marginally for small hatchbacks and mini-MPVs and there were
smaller-than-expected declines for roadsters and convertibles; the
latter two sectors probably stimulated by the fine autumn
weather.
Once again, CAP performance averaged in the mid-90s, with just
4×4 values exceeding CAP Clean.
