RSS Feed

Related Articles

Related Categories

Trade values continue to stabilise in the used car sector, says CAP

28th June 2013 Print

Used car values continue to stabilise, with only pockets of downward pressure where supply threatens to exceed demand, according to Black Book Live, the real time trade valuation trending tool published by CAP Automotive.
Retail used car demand is typically described by dealers as “steady”, but many remain frustrated by the challenge of finding good quality stock in the core 3-4 year old bracket. This shortage of suitable vehicles is a legacy of the economic slump that severely damaged the new car market until its sharp recovery this year.
Another factor influencing the quality of used car supply has been the extension of fleet car replacement cycles, which means many vehicles returning to the market now show more wear and tear, with higher mileage, than was typical before the economic downturn.
In turn this is leading to a widening of the trade price gap between the best cars and those which require significant refurbishment for sale, with the latter depreciating faster. CAP is keeping a keen eye on this factor in particular, to identify any possible trend.
The general stability of trade prices has been restored after a period of heavier depreciation, largely thanks to the influx of part-exchanges generated by a successful new car March having now washed through the market. This was reflected by a 12% reduction in auction sales information captured by CAP, which maintains the largest database of trade car transactions in Britain.
But the pressure on older cars in particular is growing as attractive new car offers continue to bring a steady stream of lower-value part-exchange cars into the system.
Black Book Live senior editor, Derren Martin, said: “Overall the message is positive for the used car market, although we remain watchful of certain factors.
“For example, daily rental registrations continue to rise and this could well increase the pressure on values of late plate cars, particularly for those manufacturers that have been most active in this area.
“Interestingly, it is amongst some premium brands that the largest percentage growth can be seen. Some of the more mainstream manufacturers, whilst still up on 2012 in the year to date, have appeared to pull back from rental business in June.
“But in general we have been seeing more of what can be described as normal seasonal movements in prices since Easter than during the same period in recent years. This pattern has continued in June, although some model ranges are positively bucking the trend when stock is short and cars are well prepared.
“The overall message is therefore reassuring but Black Book Live will continue to monitor and report every nuance of the market daily to ensure CAP reports any change in conditions the moment they occur.”