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Consider the past when predicting the future RVs of a new car

Whenever a new car is launched into the UK market it is accompanied by a massive marketing campaign. Millions of pounds are spent on hyping the car with TV ad campaigns, Alpine or other exotic test drive events, and promotions in magazines and newspapers. Add to that the huge sales push from the franchise network and you have a phenomenon from which there seems to be no escape.

At these times the pressure is on to take the hype into account when setting future residual values.

It is understandable, and not necessarily as cynical as it might appear, for those close to a launch to believe the mood will carry forward maybe three years. However, this is when the future residuals forecaster must exercise caution.

Take some of the more recent model launches. The Toyota Yaris, Seat Toledo and Jaguar S-type launches have all been accompanied by massive TV spend, quite rightly putting those cars firmly in the thoughts of anyone considering a vehicle in that class.

But the key to understanding the longevity or otherwise of that launch 'buzz' is to look at vehicles that were launched three years ago - with an equally big marketing splash. Back then we had the debuts of Citroen Saxo, Rover 400 saloon and Peugeot 406.

Nobody would deny that each of these cars represented a great improvement over its predecessor. But while they began life as fresh and innovative, three years down the line the entire market has moved forward.

The overall improvement means those particular cars are no longer seen as quite so special. There are no TV adverts for them, the majority of franchise dealers are often looking for slightly newer stock and there are many cars regarded as fresher and more fashionable. When you look at it this way it should be clear why a premium three years after the hype cannot be guaranteed.

It is often suggested that because a car is among the first to appear on the used market after three years then it still must carry some premium. But in truth it is highly unlikely that the average used car buyer will any deeper into their pockets.

After all, 12-month-old cars will have been around for two years and two-year-old cars will have been available for 12 months because not every car is kept for three years.

It is true that there is a premium associated with a new car's arrival onto the used market in the early days. It is still, to some extent, benefiting from the original or continuing marketing drive. It will also still be a scarce used car.

But, we can find no evidence in our extensive database of used car values which suggests the first 36 month/60,000 mile return will make any premium. It will make a premium over its predecessor but that will be at the expense of the predecessor - not inherent in the newer model.

There is one sure fire trick for determining whether a new car will enjoy a premium three years later - and that is to picture it at that time, when the rest of the marketplace is likely to have caught up.

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