Used car prices rise again as steady demand and richer mix continue, says BCA

Average values continued to rise in March as BCA reported steady demand from professional buyers and improved conversion rates.  

The headline average value reached a record figure for the second month running and there were average value improvements across the board.  Year-on-year, average values rose by nearly 13% as BCA offered a richer mix of stock with a lower age and mileage profile.

Average values for fleet and lease stock rose to the highest point on record, while price performance for dealer part-exchange vehicles and nearly-new vehicles improved over the month.    

March recorded the highest headline figure since Pulse began reporting in 2005, although values rose only marginally by £28 to £8,850.  Year-on-year values were up by 12.9% (£1,012), with average age and mileage falling by four months and 3,000 miles respectively. 

Year-on-year table: All cars

Simon Henstock, BCA chief operating officer UK Remarketing, said: “BCA reports a continued richer mix of stock in the auction halls which is helping to keep average values firm.  Buyer demand was significant in March and conversion rates rose as a result.  Reflecting seasonal patterns, we saw greater volumes from dealer part-exchange sources and expect this uplift to continue in the weeks ahead.”

However, he added: “As volumes remain high and with Easter imminent, we should expect to see the dynamics in the market change quite noticeably over the coming weeks.  Easter is typically seen as a watershed in the marketplace and while demand remains strong, it has waned from the peak we experienced in March.

“In a more crowded marketplace, buyers will focus on the ready-to-retail cars and that is the benchmark that will see the best returns.  This means not just retail standard presentation and condition, but ensuring vehicles are offered for sale with V5, MOT, service history, spare keys, locking wheel nuts, sat-nav disks and any other items that make the car complete.”

Henstock concluded: “Vehicles in poorer condition need to be realistically priced to generate interest in a crowded marketplace. It is important to appraise and value vehicles accurately in the current market and it would not be a surprise to see some pressure on average values in the short term.”

Average values in the fleet and lease sector rose to a new record high, rising by £276 (2.7%) to £10,455.  Retained value against original MRP (Manufacturers Retail Price) improved by a point to 43.4%, while year-on-year values were up significantly, rising by £714 (7.3%), as both age and mileage continue to decline. 

Year-on-year table: fleet and lease

Dealer part-exchange values rose by just £26 to £4,594 in March, maintaining a price performance that has been relatively stable over the past 12 months.  Year-on-year values were ahead by £212 (4.8%), with average age and mileage little changed over the period.

Year-on-year table: part-exchange

After two months of falling values, average nearly-new values improved by £767 to £18,194 in March, with model mix having a significant effect in this low volume sector.