After nine months of incremental – and sometimes substantial –
month-on-month price increases in the used car market, a slowdown
of some sort was almost inevitable. So it should come as no
surprise that the tail-end of the year has not ‘wagged’ quite as
well as some of the earlier periods of 2009.
All-in-all, however, 2009 was remarkable for the price recovery
in the used sector, following the equally remarkable falls posted
in 2008. Prices got so keen a year ago that it is little wonder
that motorists started buying again. Demand increased in the
wholesale sector very sharply in January. Initially this looked
just like a typical seasonal uplift but February delivered more of
the same, as did March.
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In fact, average prices moved so quickly over the following few
weeks that one of the price guides – CAP – had to make a
substantial adjustment to every price in the book at the end of
April because it had got out of step.
Demand alone was not driving the market, however. The auctions
were short of stock, with the fleet and lease sector happy to
extend cycles in response to the economic downturn. The new retail
market, meanwhile, was very slow indeed. This in turn impacted on
the supply of dealer-part-exchange cars reaching auction, creating
an even more extensive shortfall of stock. As a result, the auction
halls and online bidding arena got even more frantic.
But it couldn’t last. Volumes began to creep up slowly from the
dealer sector as the scrappage scheme began to generate some
business, but prices remained on an upward slant until September,
when there was a very small drop of just £4 on the average value
compared to August.
The latest figures show that average used car values have now
decreased for three months running. The overall average value for
cars sold in November was £5,903 – a fall of £118 (2 percent)
compared to October.
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By GlobalDataWith this slight slowdown, the marketplace appears to be
resuming a more typical pattern of activity. Unsurprisingly, values
remain well ahead year-on-year by £1,080 (22.3 percent), although
as prices were beginning their recovery 12 months ago, it is likely
that this figure will reduce in the months ahead.
Volumes of fleet/lease and nearly new cars sold in November were
broadly in line with those in October, although there was a fall in
P/X volumes – perhaps reflecting the difficult retail picture being
reported by dealers.
Average fleet/lease values fell by £457 to £7,159 in November.
This represented a 6 percent fall and followed a 3 percent fall
recorded in October. Even so, year-on-year values remain well-ahead
by £1,563, equivalent to a 28 percent uplift over the 12
months.
November also saw the first fall in nearlynew values since
April, as £2,191 came off. The 11 percent fall in part due to a
shift away from higher value premium models.
However, with January just weeks away, are prices set to rise
again? Watch this space!
Tony Gannon, communications director, BCA
