Average used car values at BCA dropped 4.4% in December, continuing the ongoing realignment in the market.

Since peaking in March, average used car values declined by over 22% in the intervening months

Values closed the year at £6,918, down by 4.4% (£315) on November’s figure of £7,223. The continued pressure on used car values was additionally reflected in a further 2.2% decline by the price guides in December.

December’s figure was also down 16.3% on the £8,265 recorded in December 2022.

While 2023 got off to a good start, used values realigned noticeably across the second half of the year, with broader economic factors impacting on retail activity, and new car availability and manufacturer new car incentives becoming more prevalent.

Stock mix was also hit, with a shortage of 3 to 4-year-old vehicles being overcompensated by larger volumes of older, lower-grade vehicles entering the market, further impacting average values.

Since peaking in March, average used car values declined by over 22% in the intervening months and nearly half of this realignment has taken place in the past three months.

Stuart Pearson, BCA COO, commented: “While the market has experienced continued pressure on used car values over recent months, it is worth noting that values have now shifted to place not too far away from those seen in pre-pandemic times. Considering that the UK economy has been under significant stress during 2023 with high inflation, rising interest rates and a cost-of-living crisis, the fact that a number of factors appear to be peaking could help to support an uptick in retail activity and thus drive greater stability for used vehicles prices.”

Early indications are that 2024 is underway with more stable conditions and underlying business confidence.

Pearson closed: “Our first week of online auctions in 2024 has seen a fairly significant uplift in activity across most sectors and there appears to be a level of optimism amongst our customer base that hasn’t been seen for a while. All in all, it feels like there is the potential for a much more stable month which would bring some welcome relief to sellers and buyers alike.”