The Gavel - May 2023

Kevin Blincowe - Cars

Easter and its associated bank holidays have always had an impact on the remarketing job, and combined with the holy month of Ramadan, we saw a reduction in the number of buyers at our sales in April.With that in mind, physical attendances continue to grow at our dealer part-exchange sales. Both in the north and the south of the country we are pulling in buyers old and new who want to see, hear, and touch the units on offer. And with arrivals increasing all the time, stock levels across our auction centres look very healthy, perhaps the best we’ve seen since 2020. As a result, we have had some large sales at sites which have been starved of stock which is always pleasing to see.

Looking at auction performance, the lower auction attendance combined with more vehicles meant that conversion rates dipped slightly, however, more units were sold than in recent months, so overall it was a positive result. Values on late year and low mileage cars continue to hold well, with the best examples still commanding a premium. We continue to see a shift away from the cheaper end of the market and those vehicles in poor condition, especially as CAP values remain high on these so that don’t always look great value.

Electric vehicles continue to grow in stature throughout our auctions and we are beginning to see more movement on this product, albeit it’s still slow compared to the petrol and diesel counterparts. Valuations on these cars are now more aligned with reductions in CAP, with some marques now looking like they’ve hit a valuation sweet spot.

With three bank holidays in May to contend with, it’s inevitable we’ll see more disruption to our usual sales, however there are always those savvy traders looking to get a march on the competition at those sales held on the Mondays, and often we get some surprise results.

Overall prices have plateaued or dropped in recent times, albeit still far ahead of pre-pandemic figures, but I firmly believe that whist our lanes are packed with cars, the overall shortage in the used car market will drive prices again come in the second half of the year.

Through May we have an exciting addition to our sales programme with Volkswagen Financial Services selling online every week via Simulcast. There is a lot of stock on offer from this premium vendor that should entice franchised dealers, car supermarkets and the ever-reliable trade buyers to these special sales. We have a lot to be excited about as we head into summer, with bumper sales, fantastic vendors, and an excellent team who are on hand to do a great job for buyers and vendors alike.?

Stuart Peak – LCVs

Looking back over the last six weeks, we have seen a touch of seasonality creep in as predicted. There has been the usual disruption from the Easter bank holiday and a two-week half term break for the schools, but also throw two bank holidays at the start of May into the mix and it’s unsurprising the market has felt lacklustre.Having said that, average first-time conversions in April were still very strong at 80%, although this was a 5.5% reduction vs. an incredibly strong March.?

The average age of stock sold through our lanes increased in April to a new record high of 84 months (seven years) as we see some large fleets dispose of vehicles that would normally have been sold over the pandemic period. As a result, we are seeing a wave of ‘price range’ vehicles enter the market at last, causing the values of older Euro 5 stock to fall.

At the same time, we have witnessed a drop in desirability for vans with over 90,000 miles on the clock, with performance vs. guide values reducing by up to 7% and first-time conversions also reducing up to 6%.?

Euro 6 stock performance remains consistent, and we saw little change throughout April compared to previous months. In particular, late plate, low mileage vans continued to exceed expectations although the 4x4 market has seen pockets of sensitivity which is unsurprising considering this tends to be a seasonal market.

Looking ahead to the rest of May, we now have a two-week grace period with no bank holidays to contend with, which will allow everyone to fall back into normal working routines. This should bring some stability back and allow retail demand to increase. While the market has been more challenging compared to Q1, what we have witnessed is a very normal Easter market, one which we have not been used to for the last three years.