Black Book Live reveals reasons for slow-down in used car market
Black Book Live gives a unique perspective on used car price dynamics as the only independent real time used valuations guide in the market.
CAP's “Black Book Live Market Dashboard” update for mid-November reveals the impact of an influx of lower quality cars. The 'auction buzz' – an internal CAP measure of the mood at sales – clearly reveals a downward trend. And dealers' perception of the desirability of stock on offer is also taking a tumble.
This has resulted in reduced demand and lower bids, resulting in falling values.
However, CAP is urging the market to recognise the on-going strength of prices compared to historical performance. Last year underlying values reduced between September and November by 2.8%. This year the figure over the same period was 1.5%.
One of the key dynamics that has led to the relatively low depreciation of cars this year has been the maintenance of stable retail demand. An index forming part of the Black Book Live research process measures dealer perceptions of customer appetite for their cars and subsequent sales activity. This measure has remained consistent since the measure was introduced in June.
The Black Book Live Market Dashboard records buyer perceptions in the auction environment – arguably the purest version of the open trade market. Trade buyers are asked to score their perceptions of a range of market factors, including stock quality and their own retail customer demand, with 10 representing the most positive score. 'Auction buzz' is the Black Book Live research team's own assessment of buyer mood. This 'soft research' supplements fact-based analysis to support CAP's market commentary.
CAP’s Mike Hind said: ‘Black Book Live users are now seeing values reducing on a daily basis, in contrast to the months of stability earlier in the year. This is driven by the increase in supply from sources such as dealer part-exchanges which have remained unsold or which were never suitable for retail. Our measures of the mood at auction and dealer perceptions of stock offered in the open market are a perfect illustration of the underlying dynamic of the current market.
‘Not all values are falling, however, and there are real opportunities for anyone with their finger on the daily pulse of the market to make some quick trade purchase or disposal wins even as the market slows. The key is knowing which way individual model values are moving, which is where Black Book Live users have an advantage over those who stick with a traditional monthly guide,’ he added.