Price changes significant

Time 10 years ago

auction-stock-image-copyPRICE movements in the used car market between September and October are ‘significant’ but ‘unsurprising’ says NAMA.

In September cars of all ages increased in price by just over two per cent, with three year old fleet cars faring slightly better at three per cent.

However, interim figures issued by the National Association of Motor Auctions (NAMA) show that by the end of the second week in October, the three per cent gain in the fleet sector had been completely reversed.

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Average conversion rates reached a four month high of 77 per cent last month, but by the second week of October a combination of additional auction supply and a reduction in demand, eroded this figure to close to 70 per cent and falling.

NAMA says due to the likelihood of trading conditions not improving in the coming weeks, vendors should be realistic in their prices, addling ‘the first bid is very often the best bid’.

Andrew Hulme, NAMA chairman said: ‘Professional wholesale and auction buyers have more choice than at any time since the late spring and demand has become increasingly polarised.

‘Values remain healthy for Grade one and two cars largely due to the ongoing shortage of retail ready stock, but there is little appetite for Grade four and five stock unless it is realistically valued to sell.

‘Sellers must recognise the absolute realities of the market’

‘Buyers factor in the real cost of refurbishment and downtime financing and simply deduct that from their bidding, because they want cars to retail today, not to sit in refurb shops for up to 28 days.

‘Vendors must focus on their least attractive vehicles and invest in appearance re-conditioning and refurbishment to generate buyer interest. This will address the current build up of unsold, multiple entered stock that is starting to clog the arteries of the wholesale market.

‘Sellers must recognise the absolute realities of the market – they are unlikely to achieve Cap Clean prices for Cap Average cars and, if further proof were needed, September’s data records a price differential of £900 between first time sales and subsequent sales.

‘There is every reason to believe there will be an increase in poor quality stock coming into the market over the next 8 weeks, yet little indication that retail activity and wholesale demand will improve during that period.

‘It will ultimately be seen as an act of good management if these conditions are interpreted pragmatically and all remarketing teams need to ask themselves “why should we sell a vehicle for less next month when we can sell it today for more?” We can be sure that Finance Directors will be asking the very same questions.’

James Batchelor's avatar

James – or Batch as he’s known – started at Car Dealer in 2010, first as the work experience boy, eventually becoming editor in 2013. He worked for Auto Express as editor-at-large and was the face of Carbuyer’s YouTube reviews. In 2020, he went freelance and now writes for a number of national titles and contributes regularly to Car Dealer. In October 2021 he became Car Dealer's associate editor.

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