Car values fall as market slows, reports BCA
The data shows that fleet values fell by £132 (1.7%) to £7,413 in April, with CAP performance dropping by over three points to 93.3%. Sold volumes fell by 19% compared to March.
However, BCA says that the critical issue for the fleet sector is the falling conversion rates, which generate increasing numbers of re-entries. Year-on-year values are behind by £458, equivalent to a 5.8% drop against the record average values for fleet & lease cars achieved in April 2010.
Values across the board fell to £5,626 in April, from the figure of £5,752 recorded in March – a £126 drop that was equivalent to a 2.2% decrease. It is the lowest monthly average value recorded since March 2009. Year-on-year, April 2011 is £245 (4.1%) behind the same month in 2010. Sold volumes fell by a significant 19.8% compared to March, with the multiple Bank Holidays at the back end of the month having an obvious effect on trading activity.
BCA's communications director Tony Gannon commented: 'Buyer confidence has been quite fragile for some time now and we said several weeks ago that the combination of the late Easter and the Royal nuptials had the potential to disrupt trading. When you add in the hottest April on record to the equation – which must have had an impact in the retail sector – it has resulted in the most tangible evidence of a softening in demand we have seen this year.
'This might be the precursor to a sustained period of price pressure such as that experienced in 2008. However, our view is that the market is more robust and leaner than it was three years ago, and the volumes available for remarketing are lower.
'The summer period traditionally returns the weakest value figures over the annual cycle, so sellers should look carefully at their remarketing plans and objectives now and ensure their stock is well prepared and accurately valued in line with fragile market conditions.'