NAMA reports January decline in average used car values

The National Association of Motor Auctions (NAMA) has published its monthly market report for January.

The report shows that during January the average values of used cars sold at auction across the board decreased from £5,402 to £4,856, equivalent to a 10.7% reduction between December and January. This can largely be attributed to the high volume of older cars sold at auction during January having a negative impact on the average price.

In fact sales activity increased substantially in January, particularly in the dealer part exchange sector. Although this is in line with normal seasonal changes the increase was much larger than in previous years.

However the average price of vehicles sold was down across all three sectors, although a low supply of 2.5 – 4.5 year old vehicles helped to stabilise the fleet sector which saw a price decline of only 0.6%.

Prices in the manufacturer/rental and dealer part exchange sectors fell whilst the shortage of good ex-fleet stock kept prices stable in that sector. The larger decline experienced in the dealer part exchange sector is less surprising and in line with seasonal changes. The 4% growth achieved in December in the dealer part exchange sector, which resulted in it unusually outpacing the fleet sector, can therefore be concluded as a ‘one-off’.

However when comparing the price movement versus January 2012, the fleet sector showed an increase of 12% – and that the average price in vehicles in the dealer sector also showed double-digit growth.

Tony Gannon, NAMA executive committee member said "NAMA believe that the current pricing levels are likely to be maintained, although they will be subject to some short-term volatility.

“There continues to be strong competition amongst buyers for the most desirable vehicles and this shows no sign of waning. The low supply of three year old vehicles as a consequence of poor new car sales in 2009/2010 will continue during 2013. This is likely to result in the continued buoyancy of prices in the fleet sector due to the limited amount of quality vehicles it has to offer.”