Auction prices 'fragile and subdued', says BCA
05 July 2011
Author: Hugh Hunston
Used fleet values continued to be "fragile and subdued" during June with a shortage of quality stock, according to auction house BCA.
Director Tony Gannon said: "The market is not on fire but then again it is not a calamity either, and not falling off a cliff."
He also claimed that fleet vehicle values had returned to "a bit of normality" after the disruption of April with multiple bank holidays and the royal wedding.
He added:?"Our sentiments about May continue into June and we are not talking about massive drops like in 2008. The fleet car auction values are within a normal range. There is particular issue with lower quality de-fleeted cars, whose lease lives are extended. They are more troublesome.
"Higher mileage and often poorly presented vehicles are clogging the arteries. Many of these have been entered for sale a number of times and are continuing to depreciate the longer they remain unsold."
Gannon was supported by comments from the Vehicle Remarketing Association: "Whatever the condition of specification, leasing and dealer members are saying there has almost been a total switch off in demand for cars coming back from lease extension in excess of 100,000 miles, unless they are deemed as good value."
The VRA said that late May and early June demonstrated that the market settled down after a "pretty torrid patch in March and April, but sellers should be very pragmatic about anticipated values".
Gannon's comments came after BCA issued a contrasting May report to rivals Manheim by highlighting the fourth consecutive monthly decline in fleet values, albeit down less than 1%, despite overall values rising by 2.9% to £5,790. Whereas BCA's fleet norm slipped by 1% to an average of £7349, Manheim reported a 0.1% rise, or just £5, to £6255, with hatchbacks falling 1.3% to £4342 and medium family cars losing 5% to £5414 and MPVs tumbling by 8.8% to £6831. Compact executive models continued to buck the trend and in May Manheim's registered a 3.5% increase to £8667 while 4x4s climbed by 2.9% to £12,884.
Gannon said there was a "minor disparity" between the analysis of the two major sector players but admitted that the mix of products and vendors was always slightly different and never resulted in "absolute parity".
He argued: "In any one month and sector you get fluctuations and varying interpretations."
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