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How the new car boom hits ‘late-plate, low mileage’ used car values

Bearing in mind that manufacturers have been so active with new car sales and drawn a significant volume of the available new car demand from the consumer, the question is what will need to be done in 2015 to ensure momentum is not lost.

European production volumes are not going to reduce, therefore the industry must find buyers. Anecdotal feedback suggests manufacturers and dealers will go to customers 18 or 24 months into their PCP and finance schemes to try to move them into a new car early. There is no doubt that this will have a level of success. But at what cost to used car values? How does the used car industry find buyers for these 18-month-old cars when the new deals continue to be ever more appealing? The answer is inevitably price.

The profile of used car values has already changed significantly in recent years as a result of the collapse of the new market in 2008, and it appears the profile is going to continue to shift. For those that forecast and study residual values in detail, the job is going to continue to be a challenge and the shape of the depreciation curve will be very strange, but essential to reflect the change of the ever challenging and fascinating UK car market.

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