Used car values rise as Dacia eyes market

Dacia could not have entered the UK market at a better time if the latest used car values revealed by British Car Auctions (BCA) are to be believed.

Used car prices rose 4.7 per cent last year to £6,199 – the highest used car value on record – as, for the first time, the UK’s cheapest new car fell below the average used car value.

The Dacia Sandero, a practical five-door supermini set to arrive this year at Perrys Dacia dealership in Aylesbury, is the first new car to fall below that average value with new models costing from just £6,000.

The incredible price is eye-catching on its own but when compared to the average value of a used car it represents even better value.

According to BCA data that used car value could even increase in future due to a shortage of good quality used cars on the market today.

For example, the average value of a used car in 2010 was £5,841 but in 2011 this had risen by 6.1 per cent to £5,919. A further rise of 5.9 per cent pushed the used car value figure up to above £6,000, where it sits today.

Worryingly for used car buyers recent trends show used car values actually accelerate in the second half of the year meaning values could increase further in the second half of 2013.

Latest statistics show the rising prices are not the only trend in used cars. The average age of a used car is actually growing from 59.70 months in 2010 to 60.51 in 2011. In 2012 the figure stands at 62.07.

Along with age, average used car mileage has also risen from 57,295 miles on the clock in 2010 to 58,969. This all means used car values are rising while the quality, age and mileage of used car stock is actually getting worse.

But why is this happening?

According to BCA’s Managing Director Spencer Lock: “These latest BCA figures provide further proof that the stock shortage resulting from depressed new car sales since 2008 is having a significant effect on used car values three and four years down the line.”

Schemes such as the 2010 scrappage scheme removed a large amount of good quality used car stock from the market while slower sales in the recession-hit years of 2008 onwards mean fewer new cars were sold.

The knock-on effect is less choice for buyers now in the used car market, while competition for good used cars is high amongst used car retailers.

Lock added: “While interest in the best retail quality cars can be exceptional, overall demand is best described as fragile. Dealers are less likely to speculate because they know retail buyers are spending very carefully and expecting great value for money.”

For buyers finding a used car below the average used car value for 2012 is increasingly difficult and the fact there is now a new car offering a similar cash outlay, the Dacia Sandero could be the right car at the right time for the new car industry.

Not only is the Sandero only £6,000 for entry-level models it comes with five-door practicality and is actually bigger than the likes of the Ford Fiesta.

The boot offers 320 litres of space and this can be extended to a cavernous 1,200 litres of space with the 60:40 split rear seats folded.

Buyers need not worry about engines either; Dacia owner Renault has offered up its excellent 0.9-litre petrol engine, set to appear in the new Renault Clio, to cut CO2 emissions and boost fuel economy.

This means the Dacia Sandero will be significantly cheaper to run than many used cars of a similar size when it comes to CO2 emissions-based road tax and fuel costs.

The new Dacia Sandero could be the answer for those with a budget of around £6,000 who are frustrated at the lack of used car options.

As values rise in the used car market, Dacia could be making its UK debut at the opportune moment – and that can only be good news for UK car buyers.