SEASONAL PRESSURES SEE MARKET SLOW IN JULY

AUCTION house BCA’s latest Pulse report shows that demand for older, lower value dealer part-exchange cars improved in July, but the fleet and lease sector has experienced more price pressure. The headline average used car value declined in July, as would typically be expected at the onset of the summer holiday months.

Values across the board fell to £5,633 down from the £5,662 recorded in June – a £29 decrease that was equivalent to 0.5% fall. Year-on-year, July 2011 is £151 (-2.6%) behind the same month in 2010. Sold volumes stalled after several months of steady growth, falling by 5.5% - a reflection of the generally lower levels of activity over the summer months.

Commenting on the data, BCA Communications Director Tony Gannon said “The summer months are typically a time of slow demand and reduced activity in the retail car markets and this is reflected in the wholesale used car sector. While there are, of course, worrying signs from the economy that will not have helped, it is not unusual for values to fall back in the peak summer months.”

Gannon added “However there are some pressures in the marketplace and conversion rates remain fragile. We expect the market to remain steady during August, but will be looking for activity to increase in the wake of the September plate change.”

Gannon concluded “Looking back over the past year, used car values have generally been very stable – particularly in the larger volume sectors of fleet/lease and part-exchange. This underlines the relative strength in depth of the used car market, particularly when considering the difficult economic conditions over the same period.”

By By Press Association