Average car values came under pressure in November, as rising car volumes of cars reached the wholesale sector, remarketer BCA said in its monthly Pulse report.
While demand for good quality stock remained high, there was pressure on values for poorly presented or higher mileage vehicles.
Despite this, the BCA said it saw a richer selection of stock from contract hire, finance and daily rental sources, meaning the headline average value actual grew slightly, year-on-year.
Simon Henstock, BCA chief operating officer, UK Remarketing, said: “While November’s headline value was at a record level, this was largely due to the richer mix of stock handled by BCA during the month. Looking at the detail shows there was pressure on values across the board, as rising volumes gave greater choice to buyers, with attention focused on the best examples and high demand models.”
The average cost of a used car at BCA in November reached £8,631, up from £8,126 in November 2015. During this period mileage shrank from 53,536 to 50,180, and age fell from 58.79 months to 54.91 months.
Although the average value in the fleet sector fell from its record October high to £9,995, this was remained above the average value in the sector from November 2015. Again, both the average age and mileage fell over this period.
In the part exchange sector, November values were also ahead, year-on-year, growing .6% to £4,599. While the average age fell slightly (down from 89.27 to 89.03), the average mileage actually increased by just over 800 miles, to 70,940.
The volatile nearly new sector saw year-on-year decline from £21,403 to £17,412 in November. As usual, model mix had a significant impact on this sector.
Henstock added: “While it is good news that there is plenty of demand for the best quality stock, it should not disguise that there is a two-tier market developing as volumes climb. Ready-to-retail cars continue to attract the buyer’s attention and churn quickly, but poorer condition, older and higher mileage examples need to be accurately appraised and valued in line with market expectations if they are to be sold first time.”
“With volumes remaining high, wholesale prices are unlikely to improve between now and year end, and with the delicate balance between supply and demand likely to be maintained into the New Year, we may not see the significant spike in values or conversion rates early in the year that we have seen in previous years.
“This is when the remarketing sector must work closely with its vendor customers to ensure stock is managed in an orderly fashion back into the marketplace.”