The average value of a used car in the UK rose by £174 last quarter, the latest research from British Car Auctions (BCA) has revealed.
The figures from the BCA, the UK’s largest vehicle auction company, show that the market has bucked the trend of falling prices over the previous two years. However, while there has been a 10 per cent year-on-year increase in value, the average age and mileage of the vehicles being sold has come down, which would logically suggest their price tags ought to rise.
Whenever there are fluctuations in the prices of vehicles it is important that a dealership keeps one eye on its motor trade insurance policy. If the company has cover for the full value of 20 vehicles stored on their premises and suddenly there is a rise in the value of these vehicles – in this case a 10 per cent hike on last year – then the business will need to ensure it still has adequate cover for the full value of its stock.
Simon Henstock, BCA’s UK operations director, explained the reasoning behind the rise in value. He said: “Average used car values have been rising largely as a result of an imbalance in supply and demand.
“As the economy improves, there is a greater demand from motorists to change their existing vehicle, yet supplies of good, retail quality cars in the wholesale sector are relatively limited – a legacy of the lower new car sales following the onset of the recession.
“This has resulted in some significant rises in average value across the used car market, which is highlighted when you look at the longer term trends.”