Record prices for ex-fleet cars

The value of ex-company cars at auction has hit a new high, according to data from the country’s two biggest remarketing companies.

Manheim has reported that the average value of de-fleeted vehicles in October peaked at £6,981. Rising by an average of £185 compared to wholesale prices achieved in September, the value of ex-lease and contract hire cars has now reached its highest level since the Manheim market analysis began in 2007.

At BCA, average fleet and lease car values improved by just £37 (0.4%) compared to September, but this was enough to create another new record monthly value of £8,376 – the sixth consecutive month that a record value has been established.

Year-on-year, BCA says the fleet and lease sector again posted double digit improvements, the fifth month in a row this has happened.

During the month of October, the figures from Manheim also show that the average age of ex-fleet cars fell from 51 to 49 months, while average mileages reduced from 61,119 to 58,752. Such reductions in the age and mileage of ex-lease vehicles may have had an impact on prices achieved in the wholesale market.

However, latest industry data highlights the long-term shortage of good quality, low mileage vehicles at auction, which continue to be sought out by dealers looking to fill their forecourts with attractive marques.

When compared to the original new price of vehicles, October saw the average ex-fleet car achieve a 35% return, compared to 32% a year ago, according to Manheim. This strong price performance is another indication of a market that is still relatively weak on the supply side of the equation.

BCA reports that CAP performance fell by two points to 96.33% in October compared to September, with average age also falling and mileage rising.  Performance against original manufacturer retail price fell by half a point to 41.44% across the fleet and lease sector.

Year-on-year, BCA says that the fleet and lease sector recorded a significant 14.9% uplift, which means year-on-year comparisons have recorded double digit improvements for five months consecutively.

Mike Pilkington, chief strategy officer at Manheim, said: “We’re clearly seeing the economic theory of ‘supply and demand’ in practice here as ex-fleet vehicle prices continue to rise and rise.

“While the headline figure of £6,891 has no doubt been bolstered by a reduction in age and mileage of cars coming to auction, the big picture is still the same; we are simply still not yet seeing enough good quality, defleeted cars in the wholesale market to meet demand.

“Predicting future market trends is always difficult, but you have to ask how long can the market sustain such strong values?”

Looking at the performance of the key vehicle segments in more detail at Manheim, October saw small hatchbacks and medium/large family cars – which account for 65% of its stock at auction – increase markedly.

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