Volume and quality ‘pose challenges to used car value stability’
By Kyle Lindsay
Thursday, February 6, 2014 - 14:00
THREAT: CAP Automotive make warning
Growing numbers of nearly-new cars and the ongoing shortage of clean three and four-year-old vehicles are threatening current used market stability, CAP Automotive have claimed.
Experts believe large numbers of pre-registered cars, alongside manufacturer pursuit of late-2013 daily rental business, could lead to reducing trade values for the youngest used cars.
Black Book Live, CAP’s real-time guide to benchmark used car trade values, has also revealed growing frustration over the quality of cars sold into the wholesale trade market.
According to the latest market report, only around 20% of cars available in the current trade market could be described as ‘anywhere near clean’.
CAP claim oversupply among nearly-new cars may force used values down – a phenomenon which tends to ‘ripple down’ through the other age bands.
Black Book Live cite the example of low-mileage cars registered last August which are now competing against cars registered less than a month later.
The August-registered cars are falling in value to preserve the ‘premium’ enjoyed by the newer September plate.
Derren Martin, Senior Editor of Black Book Live, said: “We are already seeing some pressure on values where short cycle cars are returning to the market.
“This increase in rental business is not confined to the usual suspects among the mainstream volume manufacturers, with some premium German brands also posting very substantial increases in that area too.
“Nor is the issue of growing supplies of newer cars confined to increased rental business.
“Certain manufacturers who have not pursued the same course have, instead, simply increased their number of self-registrations.
“This shows that, in the pursuit of market share, there is more than one way to skin a cat.”