Motor Industry News
MyCarCheck.com/Trade Used Car Market Overview April 2014:
Stock shortage, cabriolet values slip and premium oversupply RV threat
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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: “As Easter comes around the used car supply situation has just got worse. The reason is the increasing optimism among used car buyers, which is exacerbating the already dire shortage of good quality stock.
“For the trade, to have more customers is obviously a good thing, but the task of sourcing the right cars gets harder by the day. Most values have either risen slightly or held steady for another month. However, there seems to be no end to the slide in values of cabriolets, especially the volume brands, Astra, Peugeot 307/308 and Renault Megane.
“Values of small hatches are generally strong, but many older examples such as Peugeot 206, Renault Clio and Vauxhall Corsa are struggling. They’re out of favour largely because of the relatively high road fund licence band they’re stuck with. Buyers will only pay good money for a small car so long as the running costs are low.
“It’s not so very long ago that the typical fleet car was dominated by the volume brand manufacturers, mainly Ford, Peugeot and Vauxhall. How times have changed from the days when the model you were driving indicated what position you held within the company.
“Model identifying badges on the boot lid were not only present, they were simple – S, SE, GL, GLX – and understandable for everyone – private individuals and more importantly the trade – for easy valuation purposes.
“The premium brands were strictly reserved for upper management and boardroom level staff. As a result, low volumes meant that residual values were kept both strong and steady. Now the BMW 3 Series can be seen as the new Mondeo. The premium brands are moving into the ranks of high volume and the situation will only get worse.
“The advantages of running a prestige brand from a company point of view are many: steady and higher residuals over the years compared to the volume brands have meant lower rental costs; they get a high level of company status as well as staff satisfaction and retention benefits from driving an upmarket badge. The list goes on.
“Unfortunately there is a real danger of oversupply, as the likes of Ford and Vauxhall have found in the past. Premium manufacturers taking this route risk becoming a victim of their own success. Further still, when there were high numbers of volume brand cars around, prices were affordable and cars were absorbed into the used car network quite easily.
“The problems are bigger for the premium brands. As a used option they can be more expensive to buy and beyond the budget of many potential buyers. They are generally more expensive to run and maintain, due to higher service and parts costs. Also, insurance costs tend to be higher.
“It is therefore a reasonable bet that these premium residual values will not hold up as they have in recent years. Ultimately, it might mean lower numbers being purchased new in order to balance the volumes.”
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.