Black Book Live reveals dynamics behind market slowdown


Black Book Live mid-month market update - November 2012

  • Dealer caution returns
  • Used car stock desirability reduces
  • Prices remain stronger than last year
  • Consumer demand remains consistent

RESEARCH by car price experts CAP has revealed weakening used car trade values during November as supply increases and dealers become more cautious.

The trend is uncovered by Black Book Live, which gives a unique perspective on used car price dynamics as the only independent real-time used valuations guide in the market.

CAP’s ‘Black Book Live Market Dashboard’ for mid-November reveals the impact of an influx of lower quality cars and growing dealer reluctance to acquire stock unless prices are low. The ‘auction buzz’ – an internal CAP measure of the mood at sales – clearly reveals a downward trend. And dealers’ perception of the desirability of stock on offer is also taking a tumble. All of this is now resulting in reducing values.

However, CAP is reminding the market to recognise the on-going strength of prices compared to historical performance. Last year underlying values reduced between September and November by 2.8%. This year the figure was 1.5%. One of the key dynamics that has led to the relatively low depreciation of cars this year has been the maintenance of stable retail demand.

An index forming part of the Black Book Live research process measures dealer perceptions of customer appetite for their cars and subsequent sales activity. This has remained virtually constant, despite the ongoing weakness in the wider economy - proving that consumers still buy used cars even when times are tough.

The Black Book Live Market Dashboard records buyer perceptions in the auction environment – arguably the purest version of the open trade market. Trade buyers are asked to score their perceptions of a range of market factors, including stock quality and their own retail customer demand, with 10 representing the most positive score. ‘Auction buzz’ is the Black Book Live research team’s own assessment of buyer mood. This ‘soft research’ supplements fact-based analysis to support CAP’s market commentary regularly published to the trade.

CAP’s Mike Hind said: “Black Book Live users are now seeing values reducing on a daily basis, in contrast to the months of price stability earlier in the year. This is driven by the increase in supply from sources such as dealer part-exchanges which were unsuitable for retail and are now being traded out. Our measures of the mood at auction along with dealer perceptions of stock offered in the open market are a perfect illustration of the underlying dynamic of the current market.

“Not all values are falling, however, and there are real opportunities for anyone with their finger on the daily pulse of the market to make some quick trade purchase or disposal wins even as the market slows. For example, our researchers have noted many rising 4x4 values this week. The key is knowing which way individual model values are moving, which is where Black Book Live users have an advantage over those who stick with a traditional monthly guide.

"There is good news for consumers in these findings too. Because dealers are not impressed with the quality of stock available at auction they are more than ready to offer a strong part-exchange deal for any car they can easily sell on. It is often a myth that dealers won't offer the best price for cars and our research consistently shows strong dealer demand for well looked after vehicles, even in today's more cautious market”.


For further information contact Mike Hind, Communications Manager - CAP
Tel: 0113 222 2044 / 07710 152030
Twitter - @MikeH_CAP

Used car pricing and technical information from CAP has been trusted by motor trade professionals for more than 30 years. The company provides trusted and accurate pricing and technical information on cars, vans, motorcycles and trucks to the UK automotive industry every day. Founded in 1979 and based in Leeds (UK), CAP’s data and information systems serve clients across a broad variety of automotive-related sectors. CAP’s current used car values are used as the benchmark for residual values performance across the disposals industry and CAP Monitor is the leading residual values forecasting tool for the Contract Hire, Leasing, Daily Rental, Finance and Insurance industries. CAP’s new vehicle data system serves a broad variety of e-commerce, DMS, showrooms and asset management systems throughout the Retail, Contract Hire, Leasing, Finance and e-commerce sectors. CAP information also operates at the heart of many leading vehicle marketing websites and car sales portals, including Britain’s largest – AutoTrader – helping consumers safely make the best informed decisions about their purchase choices.

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Telephone: 0113 222 2000 Facsimile: 0113 222 2001