By Mike Hind, communications manager, CAP
In common with the rest of the year the uneasy balance of supply and demand is key.
The challenges faced by most on the demand side of the equation tend to be supply and condition related. Hard data certainly bears out the frequent anecdotal com-plaints that the ideal stock is hard
As we have commented often this year, this problem is exacerbated by the continued presence of franchise dealers actively sourcing used car stock due to the lack of part-exchanges that would normally be generated through new car sales.
A recent snapshot of dealer experience in being able to source stock of ideal quality revealed 73% of independents having difficulty, compared with 59% of franchised dealers, who benefit from first choice of manufacturer used stock.
And in terms of stock levels, 80% of independents described their own as too low, compared with just 47% of their franchised counterparts.
Crucially, however, these complaints revolved around the quality rather than quantity of vehicles available.
As one group used car director told us in November, there is plenty of stock available, but relatively little that is in top condition.
In this respect, however, the market is quite typical. After all, when did we ever hear the complaint that there was too much genuinely CAP Clean stock available?
One of the issues here is that there are a lot of ex-fleet cars entering the market that in no way qualify as prime retail stock.
Two things are happening to drive this.
Fleets are disposing of a lot of tired vehicles as they take advantage of manufacturer incentives on new.
Then there is the ongoing tendency to cream off the best vehicles for alternative disposal channels rather than simply sending them to auction.
This is requiring that we focus over the coming weeks and months on the impact this may have on the gap between CAP Clean and lower condition grade cars.
That said, there is still very significant demand for older vehicles around the £3-4,000 price mark and those who specialise in turning these around for retail are enjoying very strong trading.
Looking ahead to the coming weeks, a lot will depend on the behaviour of manufacturers in relation to pre-reg and late-plate supply.
One major volume player has a vast quantity of metal to shift which, at recent rates, could take up to nine months to move on.
In general, there is a lot of late- plate stock around and this was illustrated a couple of weeks ago when scrutiny of one major trade and retail website revealed 88,000 cars available up to one year old.
That said, the December edition of Black Book sees an average overall downward movement of just 1.8%, comparable to last year and smaller than the historical fall which has been the norm for a December book.
Bearing in mind the cautionary note around pre-registering and late-plate supply levels we still expect dealers to be out in the marketplace actively seeking stock in the lead-up to the New Year and possibly into January.
After all, the lessons of being caught short in early 2009 will not be easily forgotten.