Value drop at auction reflects ageing vehicles
22 August 2013
Author: Rachel Burgess
The average value of fleet cars month-on-month fell in July, as the age and mileage of vehicles rose slightly.
According to remarketing firm Manheim, the price of defleeted cars at auction dropped by an average £377 (5.1%) to £6991 last month compared with prices in June. However, the value of ex-lease and contract hire cars is still £371 higher (5.6%) than July 2012.
The average age of a vehicle jumped by two months and the average mileage increased by 710 miles, to 50 months and 58,078 miles respectively.
Manheim valuation services manager Daren Wiseman commented: "It's significant to note that auction prices in July reacted to an increase in age and mileage of vehicles, by falling back from £7368 to £6991.
"This shows that although there is generally still a shortage of wholesale stock coming to auction, the market is perhaps more focused on selling than buying at the moment."
Rival firm BCA reported a similar trend, albeit with higher values and a smaller drop. Fleet and lease cars averaged £8780 in July, a fall of £80 (0.9%) compared with June, while year-on-year values were up £727 (9.0%).
Cap performance on BCA sales improved for the second month running to 95.9% while retained value against the original Manufacturers' Retail Price fell marginally to 41.7% across the fleet and lease sector, at an average of 39.6 months and 45,223 miles.
Manheim's Wiseman added: "Although the market for defleet vehicles is facing the inevitable effects of the summer, things have not been as gloomy as first thought.
"It will be interesting to see how the latter portion of 2013 compares with the first seven months, as 2013 has so far been fairly positive for fleet managers looking to dispose of stock, with the percentage of new price retained remaining consistent throughout the year."
Meanwhile, LCV used values stayed relatively static in July, rising by £6 month-on-month, according to BCA. Average age remained around 58 months, although average mileage increase for the third month running.
Values in the fleet and lease LCV sector fell by £171 in July to £5782, a decrease of 3.1% compared with June. Year-on-year values remain well considerably ahead, up by £753 (15%) compared with the same month in 2012.
Duncan Ward, BCA's general manager - commercial vehicles, said: "Trade buyers are continuing to focus on the very best retail vehicles which are routinely making exceptional money, while vans in poor condition may struggle for attention.
He added: "Sellers should consider adjusting valuations now on poorer condition vans with a view to remarketing them before volumes begin to rise and buyers have more choice from mid-September onwards."