Recent figures have showed that the average value of a part exchange vehicle that gets sold at auction is 40% higher than it was in 2012.
British Car Auctions suggested the imbalance between supply and demand triggered the sharp rise in used car value over the past 24 months. UK operations director Simon Hensock said a lack of quality used cars in good condition has contributed heavily to pushing prices up adding: “Some of this will be down to model mix, but much of it is sheer demand in a competitive marketplace.”
When 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 also 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”.
This increase in value mean that motor traders who specialise in car sales need to increasingly check and compare their motor trade insurance policy to ensure that it fully covers the vast levels of stock they often keep. As they look for cover for their stock vehicles and compare motor trade policies, it is important to remember that their stock has increased in value compared to 2 years ago.