There are warnings that used car vales could fall significantly in the coming weeks.

Used car experts at Glass’s warned that bumper showroom business could slash second-hand values by up to 5%.

“An increase of almost 30% in fleet and business registrations means significant numbers of three-to-five-year-old cars will be added to existing used stock and this will have an erosive effect on prices.

“Without the prospect of trade demand increasing to take account of these additional cars, I’d expect prices to fall by three or 4% in May,” said spokesman Adrian Rushmore.

“After rising steadily during the first quarter, used car values are now at the tipping point. We shouldn’t say they are going to fall into the abyss, but they have reached their peak and May will be really testing.

“Right now dealers are doing reasonably well and replenishing stock, but we wonder what appetite they have for extra cars in a market that will decline.

“Another factor is the general election. It will disrupt the used car market – there was a seven per cent fall during the 2005 election - and there is so much uncertainty this time around that we expect a market hold-off lasting four weeks.”

Manheim remarketing managing director Mike Pilkington said: “We are not anticipating any major impact on the market as a result of the election, but we do expect values to fall in the second quarter. After the effects of recession, we seem to be going back to seasonal trends”

However, BCA communications director Tony Gannon said he expected prices to remain firm as competition remained high for best retail-quality vehicles.

“Recent weeks have seen some exceptional values recorded on individual vehicles and this is likely to remain a feature of the market.

“In the longer term, the lack of new fleet registrations in 2008 and 2009 will have a dramatic effect on the used supply between 2012 and 2014 and this suggests values are likely to remain firm.”
 

AM magazine provides regular insight into manufacturer networks and dealer groups - to sign up for your magazine please click on the following link to subscribe:

AM also provides a monthly electronic magazine called AMe - this provides the latest analysis of new car sales figures each month and more news - to subscribe to this ezine please click the following link:

You must be logged in - click here to login