The latest figures from the Vehicle Remarketing Association (VRA) show the used car market remains “consistent and stable” with book values for July only reducing by 1% whereas the last couple of years trade values have been marked down by up to 3%.
The market still shows signs of smaller cars being those with the best profit margins, as used car buyers continue to downsize their motoring requirements to benefit from reduced running costs.
Therefore, five-door cars are now being widely sought after at the smaller end of the market due to their increased practicality and are now for the first time commanding a price premium over three door models.
Petrol remains the preferred engine of choice at this end of the market.
As dealers enter the summer, trade buyers are becoming choosier about what they bid on and ultimately buy.
The less desirable cars in the wrong colours are now proving very difficult to shift, so adjusting the reserve price accordingly may be the only way to sell them quickly.
Buyers are also increasingly looking to purchase cars that are ready to retail, which means more vendors are spending money on refurbishment before it is offered for sale. The majority of cars are seeing a benefit in refurbishment with higher prices and first time conversion rates.
The Olympics are likely to boost demand for hire cars across the summer with more visitors entering the UK.
Therefore fewer cars are being defleeted and are remaining on the fleet sometimes for two to three years.
VRA believes this works well for the industry as there is a general shortage of two year old cars in the marketplace, so when these vehicles are defleeted, they tend to make good money.
Nearly new used car sector under “severe pressure”
The traditional six-12 month nearly new used car market continues to be under severe pressure from the aggressive new car deals on offer by manufacturers and their dealers.
Consumers who are in the market to purchase a car are now looking at a new instead of a nearly new car and so prices have fallen and are likely to remain under pressure in the short term.