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Residual values specialist looks three years ahead

Automotive data provider KeeResources is predicting a three to five per cent drop in average used car prices for 2016 onward.

Managing director Denis Keenan commented: “An extremely buoyant used market, almost by definition, has traditionally been one that is over-cooked in risk terms. As always, the primary used value driver is new car volumes.

“We have to consider overall employment statistics which have actually improved, and then factor in that public sector employment simply must shrink if we are to return to any degree of national book-balancing.”

Noting that the SMMT’s October forecast for 2013 was revised upwards to 2.015m units, with the forecast for 2014 at 2.062m, Keenan said even a 5% lift to 2.2m units could harm three and four-year RVs by up to 6-8%.

He added: “Diversification of product helps support average RVs over time, and as visual lifecycle changes are occurring at ever shorter intervals, a degree of RV protection is being inherently built in.”
 

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  • Steve Coulter - 11/01/2013 16:24

    With the state of the Eurozone we have no idea what to predict in three months let alone three years? (See Honda 500 redundancies announcement today due to poor Euro sales) Also, since we are in unchartered waters with Quantitative Easing, inflation could race away in the next three years. So, if there is new car price inflation, used car values must surely be dragged up and maintain a reasonable gap between new price and used values. Never before have so many factors weighed on the economy, positive and negative, all these predictions should be taken with a pinch of salt

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