Values of the Average Used Car up 17 Percent in a Year
The latest used car figures have shown that while the headline average used car value fell slightly in June, the annual rise in prices for used cars rose by over 17 percent. Strong demand from professional buyers for good quality used cars has helped to support values, as has continued interest in the budget market, according to British Car Auctions (BCA).
And, values for car leasing models reached their highest values on record in June. Keep reading to find out more about why high used car values can help you to save money on your car lease.
Average used car values over £7,000 for firth out of six months
The latest Pulse report from BCA revealed that the headline average monthly used car value in June declined by just 0.6 percent. However, year-on-year values remained well ahead, up by 17.3 percent.
Fleet News reports that the value of the average used car in the UK was £7,000 last month, down by £45 compared to May but 17.3 percent (£1,036) ahead of June 2012. Average values have remained at or above £7,000 for five out of six months this year, a significant step up from 2012, when values averaged nearer £6,000.
Simon Hen stock, BCA UK operations director said: “Average monthly values have been remarkably consistent this year, suggesting supply and demand are relatively well balanced. However, trade buyers are showing less interest in cars requiring significant work to bring them up to ‘showroom condition’ unless these vehicles are priced very competitively.
“In contrast, vehicles offered in ready-to-retail conditions are highly sought after, with values typically outstripping guide expectations often by some considerable margin.
“The budget end of the market also remains strong, particularly in the £2,000 to £3,000 price sector, and older, well-presented cars at sensible mileages will also regularly outperform guide values.”
BCA also revealed that fleet and car lease values rose to the highest average monthly figure on record in June. Car dealer Part Exchanges values fell marginally from May’s record level, but still recorded a substantial year-on-year increase of 28.3 percent.
The average value of fleet and lease cars was £8,860 in June, a rise of £56 (0.6 percent) compared to May. Year-on-year, the fleet and lease sector recorded a significant £818 (10.1 percent) uplift.
So, why is high car lease values good news for you if you’re thinking of driving a new car on a car leasing agreement? Keep reading to find out.
High residual values can drive down the cost of your car leasing agreement
The cost of a car lease or contract hire agreement is dependent on one main factor: the residual value of the vehicle at the end of the lease. There are a number of factors that affect this – the condition of the car and your annual mileage are two – but the anticipated value of the car is clearly crucial.
If the expected value of the car at the end of the contract hire period is high – thanks to strong used car prices – then the depreciation during your period of ownership will be lower. This will make your monthly car lease payments less expensive.
However, you should beware of additional costs at the end of the agreement. For example, if you exceed the annual mileage you may have significant mileage costs to pay.
And, if you return the car in poor condition then you may also face charges. This is because the strongest residual values for lease cars are, as BCA found, on those in excellent condition ready for resale.
Author Bio – Ryan Nolan is an article writer and travel blogger. He has manage of Tech and Travel Blog.
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