Fleet & lease car values reach record level in May, reports BCA
BCA’s Pulse report shows that retained value against original MRP (Manufacturers Retail Price) fell marginally to 41.9% from 42.1% in April, with age and mileage steady. Compared to May 2015, average fleet & lease values were up by £187 (1.9%), with retained value static and average mileage and age falling.
Helped by record average monthly values in the part-exchange sectors and a rise in nearly-new values, the headline average value of a used car rose to its highest point on record in May, improving by £106 (1.3%) to £8,261. Year-on-year, the headline figure was up by £458, equivalent to a substantial 5.8% rise.
Simon Henstock, BCA chief operating officer UK remarketing, said: “May is typically a slower month for the used vehicle sector, with the two bank holidays often proving disruptive to trading patterns. However, average values for fleet/lease and dealer part-exchange cars continued to rise and remain at record levels.”
He continued: “We are seeing a two-tier market develop where the very best presented cars are attracting a lot of attention from buyers, while poorer condition examples need to be realistically valued if they are to compete. Ready-to-retail stock is very desirable and it is noticeable how the best grade and specification cars in attractive colours can outperform the rest of the market by some margin.”
Henstock added: “With the summer months upon us, the market is now moving into a period when demand eases and typically values remain relatively flat. Household budgets tend to focus on paying for the summer holidays rather than changing the family car, and this year we still have the distractions of the UEFA Euro 2016 tournament, the EU referendum and the Rio Olympics all to come. History tells us these events have notable if short-term effects on the retail sector and this year will probably be no different. Whatever the market dynamics, however, it is vital to price vehicles in line with current sentiment and to fairly reflect the make, model, age, mileage, colour and condition when appraising cars and setting reserves.”