September 6, 2008

The whirlwind of financial turmoil continues to blow through the economy and the values of used cars are being eroded with each passing month.

British Car Auctions (BCA) have reported a fall in average prices of nearly £200 for August . This represents a fall of 3.7% from the £4949 recorded in July, and is the second consecutive month when average prices have been below £5,000.

Simon Henstock, BCA’s UK Network Operations Director commented “August is traditionally one of the slower months for used car trading and this combined with the current economic conditions meant we were unlikely to see overall values rising.”
He added “However, it is notable that fleet & lease values fell slower in August than they have since the Spring months and there is increased interest in budget cars, where values stabilised and even began to climb during the summer. Values in this sector have remained comparatively strong, providing further impetus to the notion that motorists are seeking to downsize as economic conditions tighten. Fleet-sourced budget cars have also seen CAP performance rise for two consecutive months, the only part of the fleet & lease sector to do so.”

4x4 vehicles are being hit especially hard, no doubt a combination of high fuel usage and costs, and the impending tax raid planned by the chancellor.  Used values in this sector have fallen by 17% in the past 12 months, although this roughly mirrors the annual price falls across the sector as a whole. 

Henstock commented “Some of these bigger, premium 4x4 models are starting to look spectacular value for money now. Guide prices on many bigger engined executive and prestige vehicles are now much more in line with market sentiment and even the price of fuel has fallen in recent weeks. We may well see a niche market developing to serve those ‘weekend’ and leisure motorists who always desired a bigger, more powerful premium model but couldn’t previously afford one. And if your annual mileage is below average, even the fuel costs might not be a deterrent!”

If you have any spare cash these could be great times to upgrade to a new car as prices really favour the buyer. 

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