Part-ex values in May remain consistent, as demand for stock continues
It was another month of consistency for values in the part-ex sector in May, according to Manheim’s latest Market Analysis, its barometer of monthly activity. Standing at £3,308, the average price of a part-ex vehicle at auction was just £59 down on comparable figures from April. The data also reveals typical value influencers, such as mileage and average age, were also broadly in line with April’s statistics. Indeed, average age remained consistent at 101 months and mileage saw a slight increase from 75,112 miles to 75,936.
Looking at the figures in the context of a year, May continued 2015’s trend of value appreciation from year-to-year.
At £3,208, average selling price in May 2015 was £231 (or 7.5%) higher than comparable figures from the same month of 2014.
With age and mileage holding steady across the two years, this year’s consistently robust values suggests vehicle demand is the chief influencer of selling price in 2015.
Daren Wiseman, valuation services manager at Manheim, commented: “Last month, I spoke briefly about the impact stock levels and increased buyer demand might have on dealer sector values. With May’s value figures in mind, it would appear that demand remains high for good quality, part-ex stock.
“According to data released by the SMMT, April recorded record-breaking levels of new cars registered – and this is good news for the part-ex sector. The SMMT has very recently announced May’s new car registration levels and it is more good news. British new car registration grew by 2.4% year-on-year meaning, in total, sales were up by a total of 5.7% in the first five months of 2015. Some of those new cars will of course one day need to be re-marketed and sold at auction, so in the long-term, the supply chain looks good.”
A closer look at May’s monthly report indicates four of the 10 vehicle types analysed recorded value growth. The most significant such appreciation is found with large family units, which saw values increase by over £70 to £2,413.
Wiseman continued: “May is typically a quieter month for the part-ex sector for a number of reasons. Firstly, buyers like to keep their cards close to their chest as they wait to see what units join the market following April’s plate change. Secondly, we usually see something of a slowdown post-Easter and May’s abundance of bank holidays. This year, that’s been exacerbated by the General Election. While a so-called hung parliament might have made a noticeable impact on activity in the part-ex sector, there’s always a slow-down as buyers’ wait to see what the elected government does in its first month of office.
“Looking ahead to June, the predicted heat wave set to sweep the nation this month might see a spike of interest – and therefore a spike in values – for summer-ready vehicles such as convertibles. But this is Britain, after all, and gloomy weather is just around the corner, so dealers should also consider getting ahead of the game and stocking up on winter favourites.
“It sounds like a cliché, but the art of car dealing is knowing what your customers want before they know it themselves. By utilising the full suite of remarketing options available at Manheim, dealers can stay ahead of the game and make sure their forecourt best meets buyer needs.”