Author:
ROBIN ROBERTS
Businesses wanting to dispose of their fleets are finding the used car market surprisingly consistent and stable, despite the fluctuations in the new car sector.
The keenest prices are obtained by the best maintained and presented used cars but the sticker price has to be very competitive nevertheless.
The Vehicle Remarketing Association reports that it is more of a buyers’ market with small cars being more popular as everyone seeks to downsize and save money.
Generally the used market enters the summer in a stable condition with book values for July only reducing by 1% whereas the last couple of years trade values have been marked down by up to 3%.
Most popular are five door cars at the lower end of the market which are now for the first time commanding a price premium over three door models. Petrol remains the preferred engine of choice at this end of the market.
As we enter the summer, trade buyers are becoming more choosy about what they bid on and ultimately buy. The less desirable cars in the wrong colours are now proving very difficult to shift, so adjusting the reserve price accordingly may be the only way to sell them quickly.
Buyers are also increasingly looking to purchase cars that are ready to retail, which means more vendors are spending money on refurbishment before it is offered for sale. The majority of cars are seeing a benefit in refurbishment with higher prices and first time conversion rates.
As we enter the summer London Olympics, demand for hire cars is likely to stay high with more visitors entering the UK. Therefore fewer cars are being defleeted and are remaining on the fleet sometimes for two to three years.
Currently this works well for the industry as there is a general shortage of two year old cars in the marketplace, so when these vehicles are defleeted, they tend to make good money.
The traditional 6-12 month nearly new used car market continues to be under severe pressure from the aggressive new car deals on offer by manufacturers and their dealers. Consumers who are in the market to purchase a car are now looking at a new instead of a nearly new car and so prices have fallen and are likely to remain under pressure in the short term.
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