British Car Auctions has released its data for November 2016 showing an average value stall in November. The plateau comes as rising volumes of cars continued to reach the wholesale sector.
The remarketer confirmed that demand for good quality stock remained high, but saw pressure on values for poorly presented, higher mileage vehicles. Fleet/lease, dealer part-exchange and nearly-new vehicles all fell during November.
Despite this market reality, a richer selection of stock from contract hire, finance and daily rental sources saw BCA’s own headline value up to a record level for the fifth month in a row, climbing by £40 (0.4%) to £8,631. Year-on-year, the headline figure was up by £505, equivalent to a 6.2% increase in average values.
Fleet/lease values fell by £241 (2.3%) to £9,995 while average dealer part-exchange values fell by £45 (0.9%) to £4,599. Nearly new-values fell to £17,412 during November, but model mix in this very low volume sector has a significant impact on average values.
Simon Henstock, BCA Chief Operating Officer UK Remarketing commented “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.”
“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.”
Looking to the final month of 2016, Simon Henstock expects little change: “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.”
Henstock alludes to the delicate balancing act of managing stock to protect values: “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. This means offering stock to the widest possible buyer base by a variety of physical and digital channels and ensuring there are no sudden spikes in volume that can affect demand. Equally, it is critical to appraise and value vehicles appropriately and in line with condition, and invest in the appropriate level of preparation to attract the buyers’ attention.”
