UK’s BCA Predicts Strong Used Values in 2014

BCA pic

As aver­age used car val­ues have surged to record lev­els dur­ing 2013, BCA sug­gests next year could bring more of the same in the used car mar­ket as the avail­abil­ity of retail qual­ity used cars is likely to remain limited.

Aver­age used car val­ues in 2013 have seen a sub­stan­tial year-on-year rise over 2012 accord­ing to BCA’s most recent Pulse Report, under­lin­ing the on-going value evo­lu­tion in the used car mar­ket.   Demand for first time to mar­ket fleet and lease stock has seen val­ues rise by around 15% com­pared to a year ago.  Val­ues have also risen sharply for dealer part-exchange vehi­cles, as pro­fes­sional buy­ers have focused on older higher mileage cars, with year-on-year vari­ances reg­u­larly exceed­ing 20%.

Simon Hen­stock, BCA’s UK Oper­a­tions Direc­tor com­mented “We have seen an upturn in the sup­ply of dealer part-exchanges at BCA in 2013, reflect­ing reports that retail sales have been strong.  How­ever, sup­plies of fleet & lease vehi­cles remain con­strained, a con­se­quence of the reduced new car sales to the busi­ness sec­tor fol­low­ing the onset of the finan­cial cri­sis in 2008.”

“While new car vol­umes have recov­ered well in 2013, it will be some time before we see those vol­umes reach the used car sec­tor. The avail­abil­ity of 3–5 year old cars  will con­tinue to be depressed at least until 2015, when com­pared to the vol­umes avail­able before the reces­sion took hold.”

Hen­stock added “A year ago, we were say­ing that used car val­ues could not pos­si­bly main­tain this upward price trend for­ever and, while that is no doubt cor­rect, there has been lit­tle in 2013 to sug­gest a sus­tained fall in val­ues any time soon.  Both fleet/lease and dealer P/X val­ues have been run­ning at record lev­els at BCA in recent months as deal­ers have com­peted for stock for their retail fore­courts.

“Look­ing into 2014, Jan­u­ary typ­i­cally brings an uplift in activ­ity, and this is usu­ally sus­tained until the Easter period – which often rep­re­sents a water­shed in demand.  Whether or not we see the sus­tained price evo­lu­tion we have expe­ri­enced over the past 24 months will largely depend on stock avail­abil­ity and buyer con­fi­dence, as price is effec­tively set by the bal­ance between sup­ply and demand.  Mak­ing it easy for pro­fes­sional buy­ers to source and acquire stock is crit­i­cal, so they can turn retail oppor­tu­ni­ties into firm sales and the dig­i­tal arena and effi­cient logis­tics both have big roles to play here.”

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