9:26 am, December 16, 2013
USED car values could hit new heights in 2014, according to BCA.
Average values have surged to record levels during 2013, and the company – Europe’s biggest vehicle remarketing firm – suggests next year could bring more of the same as the availability of retail-quality used cars remains limited.
Demand for first-time-to-market fleet and lease stock has seen values rise by around 15 per cent compared to a year ago, according to BCA’s Pulse report. Values have also risen sharply for dealer part-exchange vehicles, as professional buyers have focused on older, higher mileage cars, with year-on-year variances regularly exceeding 20 per cent.
Simon Henstock, BCA’s UK operations director, commented: ‘We have seen an upturn in the supply of dealer part-exchanges at BCA in 2013, reflecting reports that retail sales have been strong. However, supplies of fleet and lease vehicles remain constrained, a consequence of the reduced new car sales to the business sector following the onset of the financial crisis in 2008.
‘While new car volumes have recovered well in 2013, it will be some time before we see those volumes reach the used car sector. As the chart shows, the availability of three- to five-year-old cars will continue to be depressed at least until 2015, when compared to the volumes available before the recession took hold.’
Henstock added: ‘A year ago, we were saying that used car values could not possibly maintain this upward price trend forever and, while that is no doubt correct, there has been little in 2013 to suggest a sustained fall in values any time soon.
‘Looking into 2014, January typically brings an uplift in activity, and this is usually sustained until the Easter period – which often represents a watershed in demand. Whether or not we see the sustained price evolution we have experienced over the past 24 months will largely depend on stock availability and buyer confidence.’
According to Henstock, continuing economic confidence will be key during the new year. He said: ‘Recent indicators suggest the economy is improving and if employment levels remain high, this may tempt even more retail buyers to consider changing their current vehicle for a ‘‘newer’’ used car.
‘If retail demand rises we can expect to see even more competition in the wholesale markets with the inevitable rise in average values as a consequence.’
