Auction houses BCA and Manheim have reported that average
wholesale used car selling prices in December 2008 were nearly
£1,000 lower than in December 2007.
BCA found the average sales price for the month down by £935
year on year to £4,836 (Dec 2007: £5,771), while Manheim reported a
more dramatic drop of £969, with the used car price average falling
to £5,720 (Dec 2007: £6,689). Manheim said: “The full 12 month
picture of 2008 shows a worsening situation as the year progressed
where average values fell from February’s peak of £7,235, by a
total of £1,515.”
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In the circumstances, BCA’s announcement that there was a modest
month-on-month rise in used car values in December, with the
average price across all sectors up by £13 compared with November,
is cold comfort to fleets. (Manheim reported a month-on-month drop
of 3.1 per cent.)
Communications director at BCA, Tony Gannon said: “Used cars
currently represent exceptional value for money and the fact that
values have stabilised in recent months is encouraging,
particularly in view of the large falls we experienced earlier in
the year.
“When consumer confidence improves, we may well see prices rise
again but there is little to suggest such a scenario occurring in
the short term.”
Fleet/lease sector falls
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By GlobalDataAverage values in the fleet/lease sector fell much more sharply
month on month than overall prices, with December’s figure of
£5,471 down by £125 compared with November 2008, BCA found, and
down by £941 compared with December 2007. Performance versus CAP
Clean was down by 4.9 percentage points to 89.5 per cent (Dec 2007:
94.4).
Manheim also reported a poor performance in the fleet/lease
sector. “Values in December were down 3.1 per cent against November
to £4,711 with 27 per cent of the original ‘cost new’ price being
retained for an average of 43 months and 51,000 miles. This
contrasts with average values for fleet vehicles of £5,631 and 35
per cent of ‘cost new’ retained, only 12 months ago,” the auction
house said.
BCA commented: “The budget end of the market remains busy, but
there is a definite watershed in demand at around £5,000 – which
can be seen as the upper limit of affordability with finance being
hard to come by for retail buyers.
“Until motorists find it easier to raise finance and some
confidence returns to the consumer marketplace, there is nothing to
suggest that used car values are going to climb in the short term –
but even so 2009 should not see a repeat of the price patterns
experienced in 2008.”
BCA suggested that the widespread perception that used cars have
never been better value may boost activity levels in the first few
months of 2009 – with the first quarter “traditionally among the
strongest for used car sales” in any case.
