The average value of a used car in the UK in 2014 was £7622, the highest annual figure on record, according to British Car Auctions (BCA).
Over the course of 2014 the average value of a used car increased by 8% (£566) in comparison to 2013. Looking at monthly values, 2014 also outperformed the previous year in every comparative month.
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Average mileage dropped to 56,062 in 2014, the lowest figure of the last five years. The average age of used cars in the same period was also slightly lower than 2013, at 60.84 months.
Sales vs CAP in the same period saw the highest figure of the past five years, at 96.92%
BCA’s UK Operations Director Simon Henstock said: "In terms of the used car market, the relative shortage of stock – a result of low new car sales over several years following the onset of recession – has helped keep values high. However new car volumes have improved notably in 2013 and 2014."
According to Society of Motor Manufactures and Traders (SMMT) data, new car volumes hit 2.48m last year, an increase of 9.3% year-on-year.
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By GlobalDataHenstock also suggested a number of reasons behind the market’s strength over the past few years.
"Rising confidence and the ‘feel-good’ factor is important to consumers and notably more-so when purchasing big-ticket items. An improving jobs market, a stable economy, historically low interest rates and low inflation have given people in work the confidence to make those bigger purchasing decisions and we have seen strong new and used car markets over the past two years," he said.
Henstock said that he expected wholesale values to remain strong. However he pointed out that there might be some changing dynamics on the supply side, as rising numbers of nearly-new cars and returning PCP volumes add to the mix of fleet/lease vehicles and dealer part-exchange cars.
By segment
Average values rose across the board during 2014, with corporate fleet stock, dealer part-exchange cars and nearly new vehicles all showing substantial value increases compared to 2013.
Fleet & lease values increased by £566 to £9,455 in 2014, a 6.3% rise year-on-year. In this period, the average age remained static at just under 40 months, while the average mileage increased by around 1,000 miles to 46,700. Performance against CAP Clean fell slightly to 96.55% across the year.
A similar trend was witnessed in dealer part-exchange values, which rose by £309 (8.3%) compared to 2013. Average age at time of sale for part-exchange vehicles increased by a month to 88.5 months, although mileage fell back by 1,000 miles to 71,500. Average performance against CAP Clean improved marginally to 95.5%.
The highest rise in gross terms was recorded in the low volume nearly-new sector, where values rose by £1248 (6.1%) year-on-year.
With the general election approaching, Henstock warned there could potentially be initial uncertainty in the market following the election.
Henstock said: "History tells us there can be some initial uncertainty in the marketplace whoever prevails but this soon settles down and it is business as usual. What might be more worrying is if there is no clear cut decision from the electorate and we end up with a hung parliament.
"This means sellers should take nothing for granted and stay close to the market in the months ahead, working closely with their remarketing supplier to ensure their vehicles are properly appraised and valued to reflect both the condition and grade, as well as prepared and presented to a high standard to attract wholesale buyers."
