Predicted drop in used car values is overblown

News from EurotaxGlass’s that values of three year old cars are likely to drop by £400 in 2008 has come as a surprise to the BVRLA. “Surprise,” says John Lewis, BVRLA Director General, “Because, late last year, at one of our twice yearly meetings with Glass’s, a drop of this magnitude was not even on their agenda. Not only that but the other main supplier of information was expecting no major changes for at least the first part of this year.

“In addition,” he continued. “When there is financial pressure on buyers, as there is at the moment, they tend to move away from new and nearly new to slightly older, but well maintained cars. And to fund them via dealer finance rather than unsecured bank loans. That’s why we believe that the three year old market will continue to hold up.

“We see this in the forecasts made by more than 20 leasing companies in the BVRLA Data Survey, where the collected knowledge of the whole industry, including the guides, is brought together in an anonymised system of benchmarking to provide accurate and reliable data. And now we’re looking to do more,” he continued. “We are looking at expanding our information feeds to Members to include vehicle supply into the used car market via a collective and interactive database.”

The BVRLA meets with the guides twice a year, in a top level forum, to discuss the trends in the used car market, to discuss condition standards and buyers’ expectations. “This is a useful forum,” says Lewis. “It’s an opportunity for us to share views and understand the guides’ thinking. This is why it’s all the more surprising that Glass’s has come out with what in our view is a maverick perception that seeks to follow the trend for gloomy economic news when in reality, the pundits say that we are merely heading for a slowdown in growth rather than the recession bandwagon, which the Glass’s forecast would seem to be jumping on.”