First time conversion rates for used cars improve

First time conversion rates for used cars at auction have improved, according to the National Association of Motor Auctions (NAMA) June report.

The report shows that during June the average value of used cars sold at auction across the board decreased -0.7% from £5,420 to £5,381, however were still up 4.9% on June 2013.

First time conversion rates improved their recent downward trend, recovering from 73 to 77% with improvements across all age profiles as market interest increased. The premium of first time sold vehicles over those sold at second/subsequent entry held firm at around 7% (£325). Although increasing for the third successive month, growth in average days on site for sold stock shows signs of tapering, rising only marginally to 9.2 days.

Overall volumes were up 2.7% compared to May, and volume increase was the greatest in fleet profile cars (2.6-4.5 years old) at 6.7% and lowest for older PX cars (6.6-10.5 years old) at 0.7%.

Rising age, mileage and conversion rates contributed to the average price decline in each segment, although the downward trend follows the typical seasonal pattern.

Paul Hill, NAMA chairman, said: “New car sales have continued at the unprecedented levels we have experienced all year and this has been a bit of a surprise for some in the trade. Should this inflated level of new car sales continue into 2015 we may begin to see a potential problem on the horizon, but with European markets beginning to see sustained improvement in sales, production volume should soon be diverted back to the markets for which it was originally intended.

“The outlook for July remains positive and the trade as a whole look set to enjoy continued retail demand. What is encouraging from a buyer perspective is a slight increase in volume of ex fleet product which is expected to continue to boost choice in the market. This may further invigorate retail sales as the product offering is likely to become more varied. This increase in fleet volume will continue for some months to come and may herald a softening of values for certain mainstream models.

“In summary a good month is expected across the board. If there is any risk it will be a mild slowdown towards the end of the month as the schools break up and families take their summer holidays. However this can also have a positive side as family car sales tend to improve during this period.”