The values of used business cars sold at auction continue to go up, reports BCA Pulse editor, Tim Naylor. The price of used business cars is rising.
Cars that come off business and company car fleets – usually after three years and with 60,000 miles – are increasing in value.
Research undertaken in our quarterly Pulse report – and now published in our annual Used Car Report – show that values have risen steadily from 2004.
In the last quarter of 2004, the average price sold was £5868.
By the last quarter of 2006 this had risen steadily to £6565.
Values have continued to go upwards in 2007, nudging £7000 in the first quarter of this year.
The rise undoubtedly reflects a similar price rise in new cars and the ever-increasing levels of specification in the sector.
Apart from values rising, small business fleet managers should also be aware of the seasonality of demand.
There are times during the year when there is extra demand, which creates price spikes – which could be a good time to enter your business cars in auction.
There is demand early in the year followed by a stall at Easter time (April/May). Because, like the property market, spring is a popular time to buy a car.
There is then another lull – because after Easter the summer holidays loom – before a big spike in demand in September which gradually falls away the nearer Christmas approaches.
The other item we’ve noticed – as we’ve tracked prices in all the BCA auction houses – is the erosion of the diesel premium.
Diesel values were 5% ahead of petrol during 2006. But that differential has been narrowing.
Of course, business diesels come to market at a much higher average mileage. However, the price trend seems to indicate a narrowing in values between petrol and diesel.
Finally, despite uncertainties about the economy and rising household bills, a record £33.9 billion was spent on acquiring used cars in 2006.
This represents a rise of £1.6 billion on the previous year.
How used car values have risen
- Q4, 2004 £5868
- Q4, 2005 £6254
- Q4, 2006 £6565
- Q1, 2007 £6913
- Source BCA Pulse/BCA Used Car Report 2007
