Used car prices rose as sold volumes dropped in July - NextGear Capital Ireland
July was a steady month for Cox Automotive’s wholesale and retail brands, which reported rises in used car prices year-on-year, despite a drop in volume.
The volume of vehicles sold through Manheim’s physical and online auctions dropped 7.1% in July from the previous month; yet, compared with July 2016, figures were still up by a considerable 8.3%, notes Car Dealer Magazine.
The monthly drop is partly attributed to the 6.9% decline in part-exchange vehicles sold, stated the company.
Lower sold volumes led to the average selling price increasing by 3.4% from June to reach £6,319, along with a 12.6% rise on the year. This is suggestive of a shift to higher-value vehicles being sold at auction.
Ex-fleet sales in July followed a similar trend: monthly volumes were down by 7.5%, while average sold price was up 3.4% compared with June (at £10,023) and 2.1% higher than in July 2016.
The UK’s chief trade-to-trade auction site, Dealer Auction, also recorded a rise in sold vehicle prices in July, climbing by 17% year-on-year to £4,338. The company also witnessed notable growth in sold vehicles by franchised dealers via its platform, with a yearly increase of 11.5% units sold.
In terms of the retail market, average advertised vehicle price on Motors.co.uk remained within 1% of the prices recorded in June, at £13,557. Yet, again, prices were up 8.7% compared to the same period in 2016.
These statistics are certainly encouraging; suggesting that announcements surrounding the future of diesel and petrol cars, together with the introduction of new scrappage schemes, is yet to have a negative effect on the sector.
Head of valuations for Cox Automotive, Daren Wiseman, acknowledged that the majority of sectors remained stable during July.
“We also saw 4x4 vehicles beginning to attract the attention of buyers, due to the combination of an earlier-than-usual buying pattern around 4x4 and utility vehicles, and a shortage of vehicles in general across other sectors.”
Wiseman went on to warn that the coming months may bring some uncertainty for the sector. “The September plate change and the inevitable influx of part-exchange and fleet returns will bring will increase volume into the market but could also once again put some light pressure on values over the next six to eight weeks,” he said.
For those who are currently enjoying a strong wholesale market and auction performance, Wiseman advises to “plan for the likely impact of extra volume on sales prices and recognise the need for realistic reserve setting when it undoubtedly arrives.”