Fleet News

Premium sector sees plummeting residuals

UPMARKET and specialist cars are no longer a safe bet to guarantee good residual values and their prices are tumbling up to twice as fast as their bread and butter rivals. In the past year, used car conditions have radically changed for the premium car sector and the rock solid residual values have crumbled under the pounding received by the rest of the market.

Glass?s Information Services, in the December editorial to Glass?s Guide, is warning that the specialist car sector has been hit hard by a number of factors, particularly that new prices will fall because of the Competition Commission inquiry, due to report this month. Prices in the used car market are realigning ahead of an expected cut in new car prices, and while there is no definite news this will happen, manufacturers are taking small steps. Rupert Pontin, specialist car editor, said: ?It is clear that new car prices have been dropping for some time now, and used values have also already been severely damaged.?

Adrian Rushmore, chief car editor, said: ?Unlike this time last year, it would appear that, perhaps with the exception of BMW, all the premium brand manufacturers are providing financial support of some kind in order to stimulate demand. Unless they turn off the supply tap this will threaten used prices.? CAP Motor Research?s chief economist, Mark Cowling, said: ?This sector of the market has been in decline since the early 1990s and will continue to be, both for new and used models.?

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