Motor Industry News
MyCarCheck.com/Trade Used Car Market Overview Oct 2013:
Population increase to keep market stable as hybrid values wobble
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MyCarCheck.com/Trade is the trade valuations arm of CDL Vehicle Information Services. Based on cutting-edge industry data and feedback from independent and franchised dealers, these monthly bulletins highlight the most significant trends in the UK used car market.
Head of Car Valuations at MyCarCheck.com/Trade, Alan Senior, commented: “Values have remained relatively stable for October as the peak buying season comes to an end. Dealers are reporting that sales are steady, but demand is still high for the elusive clean low-mileage examples.
“Values for hybrid models are the exception however and values are becoming very fragile. The new car buyer is far more willing to embrace new technology as they have the assurance of solid manufacturer warranties. But used car buyers have become very wary about potential high repair costs and are unwilling to pay a premium over existing and trusted technology. Also the financial benefits of running a hybrid are minimal as real world fuel consumption is little better than a conventional petrol or diesel set up.
“The fleet industry seems to have concerns that future values of cars will nosedive now that registrations are on the up compared to last years’ numbers. The Society of Motor Manufacturers and Traders (SMMT) forecast that new car registrations for this year would be 2 million, now they have revised this figure to 2.16 million, or 8.4% more than 2012.
“We all know about the dire economic problems in Eurozone countries, with new car sales at their lowest for over 20 years. The financial crash of 2008 and the following recession saw the biggest downturn in the value of used cars here in the UK since the oil crisis of the early seventies. Then, in 2009, the used car markets woke up as buyers realised the car was an essential part of daily life and needed to be changed. Values rallied across the model ranges, especially for desirable off-roaders such as Range Rover Sport and Porsche Cayenne – models that had been almost unsellable in the immediate aftermath of the financial crash.
“The values of used cars then held stable for four years – longer than they have been for decades – all because of supply and demand. Fewer new cars have been registered since 2008, driving this stability. The previous sales peak of around 2.5 million new cars in 2007 was considered too high and unsustainable for healthy residual values. However, this latest falling values warning from the fleet industry does not take into account the rapidly expanding population in the UK.
“Since 2007, while we have all been concerned about escalating fuel costs and steep rises in the cost of living, the population in this country has been growing dramatically, by around 4 million extra bodies. No-one seems to have taken this large increase in potential buyers into account. It could easily absorb the rise in registrations this year. So, are we in for another four years of relatively stable used car values? I think we could be.”
MyCarCheck.com/Trade provides buyers and sellers with all the vehicle price data they need: ready to retail, trade, average, retail and Cat D. As a free bonus, it also provides the annual road tax cost and key DVLA information, including the make, model, colour, engine size, body style, fuel type and date of registration.
Simply enter a car, van or motorcycle registration and the vehicle’s mileage to get an accurate valuation and additional information in an instant. Once signed up you can check as many vehicles as you like at no extra cost.
The MyCarCheck.com/Trade team includes:
Gavin Amos has 15 years’ experience in the used vehicle sector. After starting out at CAP he worked in several dealerships, progressing into management. He has hands-on experience of sourcing and disposing of stock, both to trade and retail customers.
Alan Senior has 35 years’ experience in used car valuations. After a decade running a franchised dealership he spent 20 years at CAP where he was Senior Editor of the Black and Red books and co-founder of the Green book, then two years as editor of Parkers Guide before co-founding VIP Data valuation services.
David Hill specialises in LCVs. He worked with Renault, LDV and Isuzu Trucks before spending 10 years as CAP’s Light Commercial Vehicle Editor then 5 years as national used vehicle sales manager for Iveco. He joined CDL in 2011.
Rob Hobson specialises in motorbikes and scooters. After leaving a dealer role to launch CAP’s Green Book, he worked in business development for Piaggio.