British Used Car Market Is Bouncing Back

The most recent report from British Car Auctions indicates both the fleet & lease and part-exchange markets saw increases in January, while part-exchange values reached record levels. Used car values also rose significantly, partly due to the recent cold weather and shorter trading period the previous month. The strong activity in the first month of the year could prove beneficial to the retail car trade which is currently finding the new car market difficult.

“It is no real surprise to see values strengthen in January as the markets generally enjoy an uplift in activity following the extended Christmas break.  This is typically sustained until the Easter period – which usually represents a watershed in demand,” BCA’s Communications Director Tony Gannon commented

Fleet values increased by 6.9 percent to an £7,739 average, reach the highest monthly value since April 2010, while also reversing the steep average value decline in October and November of last year. Year-on-year values are up by £480, equivalent to a 6.6% rise.

The parts exchange sector also improved well, climbing for the third consecutive month running as volumes increased by some 83% over the month. Values rose by 4.8% to £2,837 in January, reaching the highest value on record for part-exchange cars, beating the previous high of £2,762 from September 2009.

However, several factors could combine to affect the market over the next 12 weeks. “While supply should remain constrained throughout February and the early weeks of March, it is likely that volumes will start to rise in late March following the plate change as de-fleeted and dealer part-exchange vehicles begin to hit the market,” Gannon warns.