Used car prices slowing - Wheels Within Wales

BCA's latest Pulse report for March shows that although average used car values are continuing to rise, the rate of growth appears to be slowing.

March saw average auction values increase for the fifth month running, but only by £11 to £5,582, compared to £5,571 in February. This follows a £400+ month-on-month rise in February and a £300 increase in January. Values started recovering last October and have risen by around 18% in the intervening months.

Year-on-year, March 2009 values are ahead of the March 2008 average figure of £5,400 by £182 or 3.3%. The difference has been narrowing all year - February 09 was £282 adrift of February 08, while in January the gap was over £650.

Early-March saw stock levels at very low levels, but volumes crept up during the month - although they remain behind normal levels for the period. The continued high demand from professional buyers kept sale conversions exceptionally high for the third month running.

Performance against CAP continues to be strong, with March's figure of 103.3% just behind last month's record figure of 103.6% for all-sector values.

BCA Communications Director Tony Gannon commented "We are encouraged that the used car and van markets have performed spectacularly well this year and demand remains much stronger than it was for most of 2008.

Gannon added "But despite the recovery in prices, we believe there is a little more fragility in the market than we have previously seen. Looking at the weekly figures, there was a significant spike in the first week of March and values and conversions tailed away a little later in the month.

"If that trend continues into April, and combined with the Easter break, then we could begin to experience a shift in market performance. If that combines with rising volumes we could see the market stalling and that is a situation no-one wants."

He continued "In addition, CAP have been very bullish about their April figures, with values rising by eight percentage points over last month in real terms. Experience tells us this is not in keeping with seasonal trends as Easter traditionally marks a period where values will soften."