Weather impacts used car market

Weather impacts used car market

08/02/2013 in News, All News, Market Insight

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The weather has had an impact on the remarketing industry since the beginning of January, particularly in the 4x4 sector, according to the Vehicle Remarketing Association (VRA).
 
The snowy and icy weather has brought out 4x4 buyers in their droves with cars particularly in the sub £5k sector performing very well as have those higher value machines.
 
Only those around the £10k mark have struggled to sell and the 4x4 export market seems to have dropped also over the first few weeks of 2013.
 
A surprise is that the soft top sector has woken up when normally interest from buyers is slow.
 
Good value winter prices and the fact that most convertibles have folding hard tops have seen conversions high and prices stay fairly stable.
 
Ex-fleet cars in high demand
 
Overall, the number of typical ex-fleet cars coming back into the used market is manageable and anything in good condition and within the 60-70k mileage sectors is in very high demand.
 
VRA members are confirming that typically ex-fleet cars are, on average, 39 months old with around 69,000 miles on the clock and leasing companies are seeing more 48 month contracts being written suggesting that replacement cycles are beginning to get longer again.
 
Higher mileage cars in the 100-120,000 bracket are struggling to find a buyer at a market price, although anything above 120,000 is being snapped up.
 
Suggestions for introducing new scrappage plans have been muted by some European governments which could mean cars older than 10 years old and with higher emissions could meet their maker, helping fuel a growth a much needed increase in new car sales at a time factory production is falling across most European markets.
 
Sub-six-month market

The UK is one of the few markets still seeing relatively buoyant new car sales, but this has meant more nearly new sub-six-month cars coming onto the market with 6-7,000 miles on the clock.
 
In some manufacturer closed sales these cars have performed well with dealers prepared to take a punt with this profile of car on their forecourts.
 
However, in some cases the sub-six-month market has been very difficult with new car buyers preferring to purchase a new car on 0% finance and low cost servicing for three years.

These cars are set to hang around for a while until their prices fall enough to ensure they no longer compete with the new market. Many are also being offered to leasing companies in bulk buy deals by manufacturers simply to prevent the cars from sitting in storage for too long.
 
This market has been further challenged with more than 8,000 sub 5,000 miles cars coming into the market over the next few months after Drive Assist went into liquidation.
 
Ex-rental stock at between six to 18 months old meanwhile is appealing to a totally different market as the mileage is between 10-20,000 miles. Cars are selling and making decent prices as they are far enough away in price and mileage not to compete with the new market.
 
Finance availability when buying a car is becoming better with interest rates fairly consistent when buying an £8-13,000 car which has helped attract buyers for the 18-30 month old stock that typically fall into this area.

(Originally reported on www.fleetnews.co.uk)


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