This month’s AM Index focuses on the ever popular supermini sector at three-years/60,000 miles on cars in CAP
It also looks briefly at the luxury executive sector as now that we have it in writing that we are heading for recession it seems a good time to review what the evidence shows at this end of market.
Values generally have stabilised this month for all but 4x4 and larger engined cars. For the most part we have seen a return to reasonably predictable seasonal reductions although we are nowhere near to a return to normal trading.
It is our belief that this point will not be reached until summer 2009. There are, though, one or two real bright spots.
The supermini sector continues to buck the trend with values maintaining their resilience to the steep falls in vehicle values we have seen.
We have been saying for a while now that there is a clear trend of consumers downsizing.
Diesel saving lost on smaller cars
The public also has a greater understanding that the premium paid for a diesel engine, particularly in smaller cars, is unlikely to be recouped. This has meant that this month diesel values fell back further than their petrol equivalents.
Petrol superminis fell back 1.4% while the diesels in the sector fell 1.8%.
The stand-out vehicles in this sector are the Citroën C1, C2 and C3 which, along with the Daihatsu Sirion all show positive movements.
In contrast, the Smart ForFour diesel reduced by 4.2% while the petrol fell less than 1% and a few of the petrol derivatives have not moved at all.
Of the 857 derivatives that make up this sector, 18% have stayed level or have moved up in value.
It is not just low fuel costs and cheap VED which adds to the strength in this sector. There is a really good choice of high quality, stylish, value- for-money cars available.
The value-for-money best sellers
Over the last couple of years some of the best-selling small cars have been replaced by newer models. In particular, the Peugeot 206 and Vauxhall Corsa, both of which are around in large numbers, are proving very popular and holding their values remarkably well.
Both are good cars to drive and still look reasonably modern and, regardless of the current gloom in the economy, there are still as many people looking for their first car.With a squeeze on their finances it is cars such as these that fit perfectly. Taking the Peugeot 206 1.1S three-door on an 05 55 plate as an example, we can see these cars trading at auction for £2,725 in Clean condition with the equivalent Corsa Breeze at £2,750, both being a great profit opportunity if well presented.
On the flip side, both of these cars together would not cover the drop in value seen on the Bentley Continental GT Coupé at three-years/30k miles in the past two months.
In percentage terms this month the car has dropped in value pretty much in line with the market at 3.6%. Last month, the car fell 6.01% so added together the drop for the last two months is £6,000.
The Rolls Royce Phantom saloon fell 3.5% this month and 4.47% last month, or £6,900. Both of these falls are in line with the rest of the market and in many cases quite a bit lower.
Clearly very few Phantoms end up at auction but it is perhaps surprising to see how many Bentleys do.
On average we see five a month at auction. In terms of sales performance, they remain relatively strong and average between 98% and 102% of CAP Clean.
So, as we have been advising for a while now, looking at whole book movements is misleading in this market as the devil is in the detail.