This year has seen a more subdued approach to trade buying but values have risen over the first two months, fuelled by a strong retail demand that necessitates continual stock replacement. The underlying strength of the used car retail market is confirmed by our own measure of incoming valuation enquiries from finance companies, which reveals very similar levels of retail activity to last year.
And as the CAP Used Car Performance Survey reveals, dealer confidence in this year's market is strong and that faith is so far being justified.
Market conditions are, however, not necessarily easy, so there is plenty of work to do in sourcing the right stock. One area which is beginning to feel the pressure, after a long period of heavy demand, is the mini MPV. While they generally carried a premium over their ordinary car counterparts, this is now beginning to erode in many cases. In Black Book for March we compare the values of a three-year-old car today, compared with the same vehicle in March 2003.
Vauxhall Zafira, Renault Scenic and Citroen Picasso in particular are growing in volume and values are easing back toward those of the standard saloon version.
Dealer research shows that where a standard hatchback is on sale at, say, £4,995 they are increasingly cautious about what premium they wish to demand for the MPV version. Small MPVs do and will remain popular because they uniquely fulfil a need, but their novelty value is eroding as customers become used to them and expect a common vehicle to carry a more affordable screen price.
There is also growing evidence that new generation diesel engines are seeing reducing premiums as a feature such as common rail diesel becomes the new standard.