Used car values plummet as external pressures hit market, BCA reports
May 17, 2022
| Author: Sean Keywood
The average price of used cars sold at auction fell month over month in April, according to BCA.
The auction company said an average selling price of £8,552, down from £9,430 in March, came amid plenty of external economic pressures, as well as disruption caused by the Easter holiday.
BCA said last month’s values were about the same as April 2021, and after values spiked late last year, the start of this year saw the market start to rise. realign, as well as the return of seasonal pressures that had appeared largely absent during the Covid-19 pandemic.
Stuart Pearson, COO of BCA UK, said: “For the first time since the pandemic began in early 2020, the used vehicle market is starting to exhibit some of the more typical traits we would have. could have expected to see in previous years.
“Traditionally, the used-car market softened after Easter as inventories swelled following the change in plate and consumers focused their spending priorities on other things, such as funding family vacations.”
“This year we have seen the market ease, but with other added pressures including cost of living compression, rising interest rates, rising energy and fuel prices and continuing concerns about the war in Ukraine.
“It’s well documented that many retail sectors are currently being impacted by belt-tightening consumers, so it’s 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 is likely to take on a certain level of confidence due to long wait times for new cars, with manufacturers still encountering supply chain issues.
He said: “We are unlikely to see significant volume returning to the new car sector anytime soon. If these conditions persist, consumers will need to re-engage in greater numbers with the used vehicle sector as many many vehicles will still have to be bought on the basis of a “need” and not a “want”.
“As employment remains strong and once some of the broader issues impacting the economy begin to resolve, we should expect to see relatively stable prices return to the used market.
“While there will always be concerns in a market that sees values change rapidly as demand evolves, the reality is that the market overheated last year and continued increases in average values were not all just not sustainable.”