Fleet News

CAP expert scoffs at residual downturn forecasts

FORECASTS of a dramatic downturn in residual values as the millennium approaches are premature, according to CAP Motor Research.

With leasing and contract hire companies dependent on accurate prediction of residual values, industry experts are anxious about supply and demand in the used car market. They fear the strong performance of three and four-year-old cars over the last two years is due largely to the small new car market in the depths of the recession, when sales struggled to reach 1.6 million per year.

In 1997 the new car market is tipped to exceed two million units, which could smother the used car market in three years time. Mark Cowling, CAP's chief economist believes such pessimism ignores key factors which ensure residual values in a market worth £20 billion a year. One factor is consumer spending, which correlates with gross domestic product and both are expected to rise as the millennium approaches, particularly with major construction projects.

Leave a comment for your chance to win £20 of John Lewis vouchers.

Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

Login to comment

Comments

No comments have been made yet.

Compare costs of your company cars

Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

What is your BIK car tax liability?

The Fleet News car tax calculator lets you work out tax costs for both employer and employee