Used car prices still rising

The strong start to 2023 in the used car sector continued in February as average values rose for the second month running.

Values averaged £8,540 at BCA, up by £140 or 1.7% compared to January 2023, as sold volumes increased for the second month running.

While average values continue to climb, the rate has slowed from earlier in the year and demand has become patchier, with some product weakening in recent weeks – notably within the budget sector – and there is continuing pressure on EV values. Despite this, the final week of February saw average values reach their highest point so far this year.

BCA UK COO Stuart Pearson said: “While the cost-of-living squeeze continues, there is some light at the end of the tunnel for consumers with news that government help with energy costs is expected to continue and forecasts that inflation will fall to around four per cent by the end of the year.

“While the SMMT has reported seven consecutive months of growth in new car registrations, with a 26.2% rise in February, issues with long lead times continue to concern the fleet and lease sectors who are the major volume purchasers of new vehicles.

“Contract extensions persist, meaning the supply of three to five-year-old vehicles into the wholesale sector could experience more pressure in the months ahead. However quickly new car registrations rise, it will be some time before we see these vehicles reaching the used sector and we expect used values to remain strong as a result.”