April 2022 values were on a par with those seen a year ago when Covid restrictions were lifted across the UK. The intervening 12 months have seen average values reach exceptional levels as pent-up demand combined with a relative shortage of stock created a frenzied trading environment at times. Average monthly values peaked at nearly £12,000 last September with price performance routinely exceeding 105% of guide expectations.
This year has seen the market start to realign with the apparent return of seasonal pressures that have been largely absent from the used vehicle sector since late 2019. Values have settled steadily over the first four months of 2022, with guide price performance moving from 99.0% in January to 94.8% in April.
The shortage of late plate stock and continued pressures on the OEM sector struggling with supply chain issues continues to keep values firm for nearly-new vehicles and anything that is ready to be sold. BCA is tapping into this demand with the launch of a new regular Forecourt Ready sale featuring stock refurbished to Grade 1 standard with a clean BCA Assured Report, a recent service, a full MOT and retail quality imagery. Early sales have seen exceptional demand and returned conversion rates well ahead of the those seen in the current general market.
BCA UK COO Stuart Pearson commented "For the first time since the onset of the pandemic in early 2020, the used vehicle marketplace is starting to exhibit some of the more typical traits we might have expected to see in previous years. Traditionally the used car market would soften post-Easter as inventory swelled following the plate-change and consumers focused their spending priorities on other things, such as funding the family holiday."
"This year we have seen the market soften, but with other added pressures including the cost-of-living squeeze, rising interest rates, energy and fuel price increases and ongoing concerns about the war in Ukraine. It is well documented that many retail sectors are currently impacted by consumers tightening their belts, and it's therefore no surprise that this has had obvious repercussions for used car retailers and the wholesale sector that supplies them."
Pearson added, "What should give the used car sector some level of confidence is that there are long waiting times for new cars as many manufacturers continue to experience supply chain issues and it is unlikely that we will be seeing significant volume returning to the new car sector any time soon. If these conditions persist, consumers will have to reengage with the used vehicle sector in greater numbers as many vehicles will still need to be bought on a 'need', not a 'want' basis. As employment remains strong and once some of the broader issues impacting on the economy start to be resolved, we should expect to see relatively stable pricing return to the used market."
Pearson added "Recognising that the best presented vehicles will always sell well whatever the market conditions, we've recently launched a new sales programme of Forecourt Ready vehicles. Cars in clean cosmetic and mechanical condition are hugely attractive to professional buyers and, utilising the wider infrastructure of BCA, we're focussed on creating additional value for all of our customers by providing more of the vehicles that the market really wants."
Pearson concluded "Whilst there will always be some concerns in a market that sees values changing rapidly as demand shifts, the reality is that the market overheated last year and the ongoing increases in average values simply were not sustainable. There's definitely been some volatility this year, but there are signs of values stabilising and, as ever, BCA's Decision Intelligence team continues to work closely with our sellers to ensure that their pricing strategies are realistic and in tune with market sentiment, and that our buyers have everything they need to make informed decisions when bidding."