THE average value of used cars decreased by four per cent in October says the latest figures from NAMA.

The National Association of Motor Auctions’ monthly market report shows that during October, average values of used cars sold at auction decreased from £4,718 to £4,558, equivalent to a four per cent decrease.

Values for fleet cars recorded a six per cent decrease. Year-on-year, the average price of cars at auction has increased by just 0.1 per cent from £4,554 a year ago to £4,558 this year.

However, NAMA says this reduction is ‘normal’ for the time of year, as auction houses remarket the influx of supply created by the September plate change. Buying from dealers also begins to wane as they prepare for the seasonal downturn in retail sales.

Apprehension from consumers regarding the fragility of the economy was also a factor, causing dealers to evaluate the amount of stock they have. Consequently overall stock levels are likely to be lower than what might be considered customary for this time of year.

‘All indications are that the auction market is likely to perform to expectations for the remainder of 2011.’

Bob Anderson, NAMA committee member said: ‘The mix of cars on offer in October was biased towards lower condition grade vehicles. However, dealers were more focused on acquiring stock that required little remedial attention and could be presented to potential buyers without delay. Higher grade vehicles are currently not in high supply and the likelihood is that this situation will not change for the foreseeable future.’

Unit sales by month from NAMA members recorded year-on-year increases for eight of the 10 months in 201 – although the association is quick to point out this is reflective of a wider supply of cars in the wholesale market, but rather that the auction companies have been successful in winning a larger proportion of the overall market.

‘All indications are that the auction market is likely to perform to expectations for the remainder of 2011. We expect to see stock inventories fall steadily between now and the end of the year, with condition grade four and five cars continuing to be more difficult to sell if unrealistically priced. Trade demand is likely to ease but competition for the best vehicles will remain high,’ Anderson added.