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March values of used cars sold at auction fell from £6000 to £5875, equivalent to 2%, according to the first monthly report from the National Association of Motor Auctioneers. Month-on-month auction sales increased by over 15% with the total number of cars sold in March being just under 94,000 units and the number of days a car was on site prior to it being sold reduced from 6.8 days to 6.5 days.
In comparison to March 2010 the average price of cars at auction has increased by a little less than 1% from £5825 to £5875. Conversion rates though have fallen by 3% since the same period 12 months ago.
NAMA chairman and managing director of Independent Motor Auctions Justin Lane said: "The market has being showing signs of slowing down during March and this has continued into April. Demand for better condition smaller vehicles is still fairly healthy. However large engine prestige and upper medium class vehicles have seen declining values and slowing demand.
"A particular concern lies with ex-fleet vehicles with high mileages. For sellers it will be important that they are realistic in their demands and set realistic reserve prices and understand that the best prices are usually obtained at the vehicles first entry into the auction."
The average price of all used cars sold at auction in Q1 of 2011 increased by 4% in comparison to Q1 of 2010. And while this is positive news the fall in prices during March is a sign that this level of annual improvement is unlikely to be sustainable in the coming months. NAMA forecasts that unless the retail market starts to deliver sales closer to the seasonal average, there is every chance that prices could come under more pressure this month.
Andrew Hulme, NAMA vice chairman and MD of BCA added: "Demand for vehicles is being suppressed by a sharp fall in consumer demand; dealers are finding they already have plenty of stock to satisfy their customers and are not looking to replenish this stock in any quantity. If they do buy they want high quality, economical, low mileage vehicles in a ready to retail condition. Unless demand picks up and stock levels fall demand and values are likely to be under pressure during April and May."
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