'In this period used demand will strengthen as spring approaches while used supply will remain modest in the run up to the new plate rush in March,' it says. 'Resale prices are now likely to stagnate from late spring into summer and dip sharply at the year end,' it forecasts.
Fast-cycle fleets are expected to bear the brunt of any downturn in residual values under the new system, with the value attached to a new plate declining. 'It may create the perception of more used cars on the market, depressing values generally. First to be hit will be late plate residuals. At worst, the first year decline could be sharp,' says CAP.