Used Car Values Set New High

British Car Auctions has revealed that used car values hit a high in December 2012.

British Car Auctions has revealed that used car values hit a high in December 2012. As such, the company's average hammer price was £7,361. That was £940 (14.6%) higher than November 2012 and £910 (14.1%) more than December 2011. Sales for these periods related to several categories of vehicle. These were “nearly new”, “fleet/lease”, and “part exchange”. Figures for December 2012 showed that nearly new cars sold for most on average, achieving £22,337. In contrast, the average fleet/lease car achieved £8,509 and the average part exchange returned £3,564. So ... why did used values rise? Firstly, British Car Auctions sold a larger proportion of high value and fleet/lease cars than normal - so there were less low cost part exchange lots on the books. Furthermore, new car sales were fairly slow from 2008 to 2011. That was the effect of the recessions, of course. Used stock was therefore more limited in December 2012 than in the more distant past. As with every product ... poor supply mixed with fair demand boosts values.

British Car Auctions Communications Director, Tony Gannon, said: “December typically records an uplift in month-on-month values and this year was no exception. In fact, records were established in 2010 and 2011 so it should come as no surprise that December 2012 would set a new benchmark value - particularly when factoring in the general lack of stock in the marketplace. Overall, prices remain strong despite demand being relatively flat and the lack of stock has generally meant good returns for business sellers. This stock shortage is a long term issue and is unlikely to change until new car volumes pick up significantly and the economy improves enough to generate a bigger churn of vehicles in the marketplace.” Mr Gannon concluded: “Currently, there appears to be little on the horizon that is going to change those wider market conditions but with the continuing economic pressures, and reduced consumer confidence, we should not expect to see the same robust value growth in 2013 that was experienced in 2012.”

That brings us to new stock. The Society of Motor Manufacturers and Traders has revealed that 123,557 new cars were registered in December 2012. That was 4,369 (3.7%) higher than the same period last year. Furthermore, total sales for 2012 were 2,044,609 which was 103,356 (5.3%) more than 2011. The best selling car of the year was the Ford Fiesta, so 109,265 found homes. This was followed by the: Vauxhall Corsa (89,434), the Ford Focus (83,115), the Vauxhall Astra (63,023), the Volkswagen Golf (62,021), the Nissan Qashqai (45,675), the BMW 3 Series (44,521), the Volkswagen Polo (41,901), the Mercedes-Benz C-Class (37,261), and the BMW 1 Series (34,488). Interestingly, 6 of the 10 best sellers were either superminis or small family cars. That suggests most motorists want vehicles with low running costs. But despite the increase in sales new registrations were slow compared to previous years. As such there were 2,247,402 registrations during 1998, followed by 2,458,769 in 2001, and 2,579,050 in 2003. It seems the industry might be short of second-hand stock for a considerable time.