Motor Trader The award-winning and longest running UK magazine for car retailing professionals. Your first stop for News, Jobs and Reports for the motor industry.
Wholesale used car prices remained strong throughout the first quarter, according to Manheim.
The auction house said the recovery it noticed at the beginning of the year continued through the first quarter of the year.
“By the end of March, the entire 21 per cent residual value deficit experienced in 2008 had been recovered. The bounce began with a bang on the first trading day of January and the uplift in activity and prices has not abated since,” said Rob Barr, group communications director.
The average used car value in March was £6,694 — a 31 per cent rise on December 2008’s deflated figure and £5 higher than the March 2008 average.
This turnaround is against a backdrop of new car sales tracking at 30 per cent below last year, substantially reduced car production and rising unemployment.
“Despite some reports of stock shortages, overall auction sales volumes are actually up in 2009 compared with the same period in 2008,” he said.
Manheim attributed the rising volumes to low pre-Christmas stock levels, a switch in dealer focus from new to used, realistic wholesale pricing and competition for good quality stock.
“The recovery in the wholesale market and the effect on used car prices has been unprecedented. Even though we thought that conditions in December were showing some signs of stability, I don’t mind admitting that none of us saw this coming,” said Barr
“The first quarter is traditionally strong for used car sales but of course last year’s market, in particular the second half, was anything but normal. I think dealers will continue to invest heavily in used car retailing for the remainder of this year and we should expect to see prices levelling off shortly. Whatever happens, Q1 will be remembered as one of the most extraordinary three months of used car activity in recent memory.”.