Average used car values at BCA continued to move as 2023 drew to a close, ending at £6,918 in December, down by £315 (4.4%) on November’s figure of £7,223. The continued pressure on used car values was additionally reflected in a further 2.2% decline by the price guides in December.
Used values realigned noticeably across the second half of 2023, with broader economic factors impacting on retail activity, and new car availability and manufacturer new car incentives becoming more prevalent. Additionally, stock mix declined with a shortage of 3 to 4-year-old vehicles being overcompensated by larger volumes of older, lower grade vehicles entering the market, further impacting average values.
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Since peaking in March, average used car values declined by over 22% in the intervening months and nearly half of this realignment has taken place in the past three months.
Stuart Pearson, BCA COO commented: “Feedback from our customers highlights that the last quarter of 2023 continued to be extremely testing, with many factors playing into the retail slow down experienced. Buyers were caught in a dilemma of whether they should ‘stick or twist’, however a number actively took advantage of significantly lower prices in December to refresh their forecourts and have been realigning their existing stock on a weekly and often daily basis.”
He added: “Despite the pressures, BCA reported a very positive sales programme between Christmas and the New Year at a time when other auction operators were inactive. Sales staged between December 27th and New Year’s Eve saw conversion rates for some sales rise above 90% as buyers competed strongly for stock, following some lift in retail activity and the anticipation of the market improving in January. Buyer numbers also lifted compared to the same period in the previous year, highlighting the popularity and convenience of the BCA sale programme. There was also strong demand for BCA’s fixed-price Buy Now sales, with 52 vehicles actually selling on Christmas Day!”
Pearson added: “Whatever the market conditions, our role is to present our buyers with the best possible selection of stock at every price point and condition standard, at a variety of ages and mileages, with every possible make and model represented. Buyers can join sales via BCA Online or the BCA Buyer app, giving them access to a nationwide basket of stock every day from wherever they happen to be. Our online auctions continue to be the channel of choice for most of our customers and our buyer base has risen significantly during the past year, driven by the volume and variety of stock on offer and the ease of purchasing, at whatever time suits our customers.”
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By GlobalDataHe continued: “While the market has experienced continued pressure on used car values over recent months, it is worth noting that values have now shifted to place not too far away from those seen in pre-pandemic times. Considering that the UK economy has been under significant stress during 2023 with high inflation, rising interest rates and a cost-of-living crisis, the fact that a number of factors appear to be peaking could help to support an uptick in retail activity and thus drive greater stability for used vehicles prices.”
Pearson closed: “Our first week of online auctions in 2024 has seen a fairly significant uplift in activity across most sectors and there appears to be a level of optimism amongst our customer base that hasn’t been seen for a while. All in all, it feels like there is the potential for a much more stable month which would bring some welcome relief to sellers and buyers alike.”
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