BCA has reported that it expects used car values to “remain strong” after 1.7% month-on-month rise in February – despite growing volumes.
The Constellation Automotive-owned remarketing giant reported that values averaged £8,540 – up £140, or 1.7% – last month as sold volumes increased for the second month running and performance against guide price improved marginally to 98.4%.
BCA also said that February had delivered the two highest sold volume weeks and the three highest weeks for buyer numbers in its current financial year.
Chief operations officer Stuart Pearson said: “While the cost-of-living squeeze continues, there is some light at the end of the tunnel for consumers with news that government help with energy costs is expected to continue and forecasts that inflation will fall to around 4% by the end of the year.
“While the SMMT has reported seven consecutive months of growth in new car registrations, with a 26.2% rise in February, issues with long lead times continue to concern the fleet and lease sectors who are the major volume purchasers of new vehicles.
“Contract extensions persist, meaning the supply of bread and butter 3- to 5-year-old vehicles into the wholesale sector could experience more pressure in the months ahead.
“However quickly new car registrations rise, it will be some time before we see these vehicles reaching the used sector and we expect used values to remain strong as a result.”
BCA data for February did show that the rate of used car value growth had slowed from earlier in the year with demand becoming “patchier” and some product weakening in recent weeks – notably within the budget sector.
UIt said there was also continuing pressure on EV values.
Last month Cap HPI director of valuations Derren Martin predicted that car retailers who had suffered “significant pain” as a result of a recent slump in used electric vehicle (EV) values could soon be seeking out zero emission forecourt stock once again.
“I’d say that the hit has already been taken and we’re starting to see values stabilise again”, he said.