Average used car values increase

The average values of used cars sold at auction across the board during February increased from £4,856 to £5,359, equivalent to a 10% increase on the previous month.

The National Association of Motor Auctions (NAMA) suggest that the increase in average values can, in part, be attributed to the change in mix of vehicles sold with a higher volume of younger cars sold at auction during February having a positive impact on the average price.

However, on a like-for-like market sector basis, values were also up. This can be credited to a shortage in supply along with evidence of increased confidence amongst buyers.

Price changes February compared to January, by customer type

Prices for first time entries compared to prices at subsequent sales

The price difference between first time entries compared to subsequent sales has been closing in recent months.

Whilst the gap widened from £100 to £375 this month the proportion of younger cars, where the price difference is likely to be higher, increased. This price difference remains far below the 2012 average of £550.

It is likely that this is due to vehicles being more appropriately priced in the first instance as vendors are pleasantly surprised by the strength of prices, allowing sales to be concluded more readily.

Tony Gannon, NAMA executive committee member, said: "During the first two weeks of March it has been evident that competition amongst buyers remained fierce for the most desirable cars.

“However, NAMA members are now reporting a downturn in auction activity as the increase in supply caused by the new March plate meets the normal seasonal decline in retail activity.”