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Prices plateau as summer market cools and economy stalls
publication date: Aug 13, 2010
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author/source: Robin Roberts
BCA's latest Pulse report shows that demand for older,
lower value dealer part-exchange cars is largely unchanged in July, but
the fleet & lease sector has experienced more price pressure.
In broad terms, however, the headline average used car value was
relatively static in July, with overall volumes, model mix and demand
levels similar to those seen in June.
As a result, the average used car value at BCA recorded a modest
decrease in July, from £5,802 to £5,784 - a fall of just £18 or a
quarter of one percent. Performance against CAP Clean increased
marginally from 94.68% to 94.83%.
For the second month running, a relatively rich mix of cars has
disguised some of the pressures in the marketplace and conversion rates
remain fragile. That said, it is not unusual for some market issues to
surface in the holiday season and this should be judged as typical
seasonality - a factor only seen returning in recent weeks. |  | Year on year values were behind for the third month
running, by £244 - the largest ‘negative' variance seen this year -
compared to the July 2009 figure of £6,028 (the first time on record
that average values had breached the £6K ‘watershed').
However, values
are ahead compared to two years ago - July 2008 saw average values
tumble to £4,949 - nearly, but not quite the lowest point they reached.
| Looking in a little more detail at the market sectors, fleet values have
fallen from £7,456 to £7,180, with
Part-Exchange stock remaining
relatively flat at £2,541 - just £17 down on last month's figure.
Nearly-new, in contrast, climbed from £18,792 to £20,039 - an increase
of £1,247 (+ 6.6%).
Average fleet values fell by £276 in July, equivalent to a drop of 3.7%.
With model mix very similar to last month, this was a reflection of
softer demand as average prices fell in two of the three main product
sectors. Despite this, sold volumes actually increased by just over 1%
in July compared to June.
Premium fleet models fell by £417 (3.8%) from £10,866 to £10,449, while
volume models dropped from £5,509 to £5,425 - a decrease of £84 or 1.5%.
Volume values have been declining gently since April when they peaked
at £5,835. In contrast, budget fleet/lease car values rose from £3,172
to £3,359, a substantial 5.8% increase - with the caveat that numbers
are low in this sector and model mix has a disproportionate effect on
value.
Year-on-year comparisons show average fleet & lease values behind by
£196 (2.6%) with CAP performance down by more than six points.
Values slipped again in the P/X market, but the drop was marginal at
just £17. CAP percentage performance improved by over half a point for
the second month running, reaching 91.07% in July. Having dropped over
£100 in June, P/X premium stock recovered a little of the value lost
the previous month with a slim £8 increase in value to £4,487. Volume
cars fell by £40 to £1,744, continuing a trend that has been in place
since April. Budget P/X cars also fell in value - from £1,371 to £1,337
- a decrease of 2.4%.
Having recorded a sizeable drop from £20,393 down to £18,792 in June,
nearly-new values bounced back to £20,039 in July. CAP performance also
improved, from 101.48% to 102.74%.
Values for premium nearly-new cars improved by £262 (just over 1%) to
£23,744, following the £1,800 fall recorded in June. Average values for
nearly-new volume cars improved by £173 to £10,678.
BCA Communications Director Tony Gannon commented, "Prices have
continued to be under some pressure in July, especially in the fleet
& lease sector, but sales volumes have held up well in the month,
and demand is there for vehicles that are valued in line with their
condition and market expectations. Although we have not experienced
seasonal patterns in the market for some time, we are seeing them now
and should expect these to continue over the rest of this year." | | | |
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