Increased demand and nearly a 6% rise in prices during January have been met with cautious optimism by the industry.

Average monthly fleet and lease used car values rose by £248 – up nearly 5% - to £5,719 from the previous month, following consecutive falls for three previous months, according to BCA.

But, year-on-year, average used fleet and lease values in January were still almost exactly £1,000 behind those recorded in 2008.

Manheim’s latest market analysis paints a similar picture, with the average selling price up in all three sectors – fleet, dealer and manufacturer.

However, while the surge in prices and reports of conversion rates close to 100% are a shot in the arm for the market, experts claim it is too early to call an end to the downturn.

“Although there appears to be healthy consumer interest, it remains to be seen for just how long this will be sustained,” said Mike Pilkington, managing director at Manheim Auctions and Remarketing.

“There is no doubt that dealers had reduced their stocks pre-Christmas and a lot of this current demand has been driven by the need to replenish empty forecourt spaces.”

Stock from all sources had been relatively limited in January compared to previous years, according BCA, helping to push prices up.

“With three subsequent months of price rises across the widest basket of cars, it is tempting to suggest that a recovery in average used prices is on the way,” explained Tony Gannon, BCA’s communications director.

“However, January is traditionally a strong month and a rise in December was marginal – just £12 month-on-month.

"That said, overall performance in January was very strong.”

Manheim’s and BCA’s cautious response to January’s figures was mirrored by CAP, which said it remained too early to call an end to the downturn.

But, Adrian Rushmore, managing editor at EurotaxGlass’s, added: “Values are now at historically low levels, and dealers across the UK are hoping that this will continue to provide much needed stimulus to sales over the coming months.”

 

Best fleet performers January 2009

  • Soft roader + 16.3%
  • Large coupe + 13.0%
  • Small hatchbacks + 10.6%
  • Large family + 10.5%
  • Supermini + 8.6%
    Source Manheim

What puts off a potential buyer

 

  • Lack of communication - buyers should be able to see details, including images, of the vehicles online ahead of the auction
  • Lack of vendor attendance/active involvement - the presence of the vendor on the rostrum demonstrates a willingness to ‘deal’
  • Unrealistic reserve price
  • Appearance of the vehicle - is it clean or damaged?
  • Incomplete documentation/lack of service history
    Source Manheim and BCA