BCA’S October Pulse report shows that average monthly values have dropped to £4743 – their lowest point of the year.
But, says the auction company, the October fall of £69 was actually lower than in 2007. What’s more, it comes on the back of a small rally in September.
The dramatic, rapid-fire crash that has seen average values tumble by over £1000 in 2008 alone could therefore be nearing its end.
However, stemming the fall is one thing. Signalling a turnaround is another, and BCA’s Tony Gannon says there’s unlikely to be any short-term relief for used car dealers.
‘The market is experiencing the sort of conditions that can promote extreme short-termism amongst professional buyers. It can be difficult to buy for stock in certain price bands, because the fear is that further price falls will wipe out any possible profit margin.
‘Those holding large volumes of retail product have to turn stock quickly and efficiently, or face the prospect of inventory depreciating by often substantial amounts, as wholesale prices fall and the price guides try to catch up.’
But, despite this, there are still guys out there who are doing well, both as sellers and buyers. Their secret? Thinking smart, working fast, adapting quickly to market conditions and customer demand.
The trick is to price keenly and get customers through the door. ‘Feedback from our auction buyers suggests that retailers selling affordable budget stock are finding a steady demand from retail customers,’ said Gannon.