The average value of part exchange vehicles that are sold at auction is 40 per cent higher than it was in 2012, new figures have revealed.
According to British Car Auctions (BCA), the imbalance between supply and demand has triggered the sharp rise in used car value over the past 24 months. UK operations director Simon Henstock said that the lack of high quality, good condition used vehicles had pushed prices up, adding: “Some of this will be down to model mix, but much of it is sheer demand in a competitive marketplace.”
This steep increase in used car values means that dealerships need to constantly consider the level of cover they are getting from their motor trade insurance policy. As they seek protection for the stock they keep on the premises, the sizeable rise in what each vehicle is worth compared to two years ago requires motor traders to constantly evaluate if the insurance they have provides adequate cover.
In explaining the increasing used car values, Mr Henstock said: “Cars entered from dealer part-exchange sources have typically outperformed the market in 2014 and average values reached record levels, as dealers continued to supply the marketplace with well-presented, realistically valued cars to tempt the buyers in.”
He added that this year, as the economy improves, there has been greater demand from motorists to upgrade their vehicles, placing newer models that are in better condition at a premium. As there has been a lack of such vehicles on the market, prices have increased and may continue to do so over the coming months.