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CAP trade watch: Exceptions to the rule are normal

Seasonal changes in demand for used cars used to be predictable. Assumptions could be made about retail interest and trade value movements with relative safety, but that has now changed.

This fluidity is not confined to the automotive industry – markets in general are increasingly fickle and unpredictable.

This points up the need to gather more market intelligence than ever before to reduce risk.

Research has revealed a recent turn of events which were entirely unexpected by the trade and which illustrates this point clearly.

December is usually a quiet month and January is expected to take off in terms of retail activity. But, almost universally, dealers were surprised by the level of retail activity in December and disappointed with their sales performance in January – a reversal of the norm.

The impact of this on used car values has been mixed. For example, based on a sample of three-year-old cars at four mileages, sector-by-sector performance has varied considerably.

Low mileage superminis have performed strongly, but this trend has not been replicated for higher mileage examples (31,000 to 50,000).

Exceptions include the Vauxhall Corsa 1.0i 12V Club and Peugeot 206 1.9 D LX , which achieved price increases of between £75 and £150 depending on mileage in the early part of the year.

The lower medium sector demonstrated considerable strength at both low and average mileages, with the Ford Focus 1.6 Zetec and Vauxhall Astra 1.6i Club showing a price uplift of in the region of £100.

Research also suggests large family cars are a stronger retail prospect at higher than lower mileages. This is driven by increased consumer confidence in the reliability of high mileage (70,000 and above).

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