Auction reports suggest used car values have increased in May
Reports from the British Car Auctions has shown that the month of May has been a successful month for the sales of used cars. Indeed, for the second month in a row now the value of used cars has increased across the board. May saw a 1.3% increase in the value of used cars, that’s an average increase of £106 to £8,261.
Simon Henstock, BCA Chief Operating Officer for the UK reported that May is usually a slower month for the trade of used vehicles due to the two bank holidays that “often prove disruptive to trading patterns”.
Henstock reported that there was a development in the pattern of sales for used cars throughout the month of May: “We are seeing a two-tier market develop where the very best presented cars are attracting a lot of attention from buyers, while poorer condition examples need to be realistically valued if they are to compete. Ready-to-retail stock is very desirable and it is noticeable how the best grade and specification cars in attractive colours can outperform the rest of the market by some margin…in contrast, vehicles in poor condition and at above average mileage should be carefully appraised and sensibly valued in line with the condition report in order to attract buyers and sell first time. Where appropriate, consider SMART repairs for quick wins on damage, particularly for scuffed alloy wheels, chipped or scratched paint, minor dents to bodywork and missing trim”.
Typically, summer season usually slows down in regards to the car trade as demands tend to ease up whilst individuals focus on the distractions that summer brings about. As a result, market values tend to stagnate and remain flat throughout the summer months.
Henstock also reported that “Household budgets tend to focus on paying for the summer holidays rather than changing the family car, and this year we still have the distractions of the UEFA Euro 2016 tournament, the EU referendum and the Rio Olympics all to come. History tells us these events have notable if short-term effects on the retail sector and this year will probably be no different. Whatever the market dynamics, however, it is vital to price vehicles in line with current sentiment and to fairly reflect the make, model, age, mileage, colour and condition when appraising cars and setting reserves.”
What is interesting is if we take a closer look into the statistical analysis behind the car sales for May, the average value of estates increased by 2.6%, hatchbacks by 1.1% and saloons trailed behind, only increasing by 0.7%. The value of MPV’s fell by 2.8% however.
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