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Used volumes build and residual values slip in October

derren martin 2015

Average used values dropped by 2.2% with an expected seasonal slide, according to the latest figures from CAP.

Derren Martin (pictured), senior editor at CAP Black Book, said: “Based on Black Book Live movements in October, this year is following the same trend as last year. Last year saw decreases of over 5% in the winter months, leading to drops of 3.1% for December and 2.2% for January.

“With volumes ahead of where they were a year ago, and only likely to increase, and demand similar, there is little to suggest an improvement on last year’s figures.”

CAP claims franchised dealers have high volumes of late-plate, pre-registered vehicles, and will be reluctant to purchase short-cycle, ex-company cars, demonstrators and rental buy-back returns from manufacturers. This will drive down both wholesale and retail prices on vehicles at this age, as franchised dealers negotiate hard, or manufacturers decide to sell outside the network.

Despite the recent adverse publicity for diesel vehicles, values of diesel models overall dropped by less than petrol ones, in percentage terms. This illustrates that buyers and consumers have not fallen out of love with the diesel engine just yet, still recognising its fuel economy and performance benefits plus low CO2 credentials, particularly on newer models.

VW emissions scandal

Martin said: “The emissions scandal is likely to remain a hot topic. With plenty of stock around there is still potential for some values to be affected, at least in the short to medium term. Longer term, there is no reason to reflect any changes in CAPs Gold Book values, although much depends on how the affected manufacturer reacts to the issues.

“Whether weakness is in the overall market over the final quarter, or within specific brands, fuel types, engines or trims, it will be fully reflected real-time in Black Book Live over the potentially more volatile upcoming weeks.”

From around the middle of October, the auction halls finally started to see the expected increase in volumes from the September part-exchanges and fleet returns and at this point, the market weakening accelerated, coinciding with less buyers in the halls.

Martin said: “Most volume ranges slipped in value through the month, with many of the drops being little and often. Examples of some mainstream models that dropped in value, by around one to two per cent each time, on around three or four occasions through the month, were the Vauxhall Corsa, Ford Focus and Volkswagen Golf. There was certainly no shortage of vehicles available from these and other high-volume manufacturers.”

All of the main sectors were affected by the downturn, with city cars and convertibles the hardest hit in percentage terms. The former mainly affected by increased volumes and pressure from new car finance offers, the latter due to seasonal factors. Larger SUVs fared slightly better than the rest of the market and their smaller counterparts.

Where particular VW diesels dropped in price, the prices had been dropping prior to the “crisis”, and where they have been affected by more than the market norm, it would appear to be due to high volumes, in particular the 1.6TDi 105ps engine, which takes up 75% of all  Golf Diesel trade data received by CAP.


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