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Used car values fall as external pressures affect market, BCA reports
Date: 17 May 2022 | Author: Sean Keywood
The average price of used cars sold at auction fell month-on-month in April, according to BCA.
The auction company said an average sale price of £8,552, compared with £9,430 in March, came amid numerous external economic pressures, and also disruption caused by the Easter holiday.
BCA said last month's values were roughly on a par with April 2021, and that following soaring values at the end of last year, the start of this year had seen the market begin to realign, as well as the return of seasonal pressures that had appeared largely absent during the Covid-19 pandemic.
BCA UK COO Stuart Pearson said: "For the first time since the onset of the pandemic in early 2020, the used vehicle marketplace is starting to exhibit some of the more typical traits we might have expected to see in previous years.
"Traditionally the used car market would soften post-Easter as inventory swelled following the plate-change and consumers focused their spending priorities on other things, such as funding the family holiday."
"This year we have seen the market soften, but with other added pressures including the cost-of-living squeeze, rising interest rates, energy and fuel price increases and ongoing concerns about the war in Ukraine.
"It is well documented that many retail sectors are currently impacted by consumers tightening their belts, and it's therefore no surprise that this has had obvious repercussions for used car retailers and the wholesale sector that supplies them."
Pearson added that the used car sector should take some level of confidence from continuing long waiting times for new cars, with manufacturers still experiencing supply chain issues.
He said: "It is unlikely that we will be seeing significant volume returning to the new car sector any time soon. If these conditions persist, consumers will have to reengage with the used vehicle sector in greater numbers as many vehicles will still need to be bought on a 'need', not a 'want' basis.
"As employment remains strong and once some of the broader issues impacting on the economy start to be resolved, we should expect to see relatively stable pricing return to the used market.
"Whilst there will always be some concerns in a market that sees values changing rapidly as demand shifts, the reality is that the market overheated last year and the ongoing increases in average values simply were not sustainable."
