Observations Tim Naylor, British Car Auctions

Average values rose sharply in December in a short month for trading that was also relatively short of stock. Across the board used cars averaged £7,361, a significant month-on-month rise of £940 (14.6%) compared to November and the highest monthly figure on record. Year-on-year, December 2012 was ahead by £910 or 14.1%.

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However, model mix was largely responsible for the increase, as BCA sold a greater proportion of high-value fleet/lease and nearly-new cars during December, while dealer part exchange volumes fell in the immediate pre-Christmas period. BCA also sold an increased number of high-value vehicles via the online Buy Now channel over Christmas.

December typically records an uplift in month-on-month values with records established in 2010 and 2011. December 2012 set a new benchmark value, aided by the general lack of stock in the marketplace.

Overall, prices remain strong despite demand being relatively flat and the lack of stock has generally meant good returns for business sellers. This stock shortage is a long-term issue and is unlikely to change until new car volumes pick up significantly and the economy improves enough to generate a bigger churn of vehicles in the marketplace. Alongside the change in mix, professional buyers were relatively active over the month, competing to secure stock for retail forecourts for the busy New Year period. Values generally improved in all three age sectors, although data for some body shapes was less robust.

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