Fleet News

Used car price gloom

THE Budget did little to kick-start any increase in residual values, and the long term prospects for inflation in used car prices look remote. An anti-inflationary Budget will not increase the public's disposable income, according to Colin Thornton, sales and marketing director of ACL.

He added that economists at ACL's parent Standard Chartered were predicting a maximum 0.5% cut in base interest rates in the short term, hardly enough to prompt a retail spending spree. The Budget had bad implications for cars with poor fuel consumption, with retail buyers more likely to fight shy of ex-company car 'gas-guzzlers' as pump prices continue to escalate.

This may even apply to diesel engined vehicles, according to Thornton, if Chancellor of the Exchequer Gordon Brown continues to increase unduly the duty on diesel above the duty on petrol. The one glimmer of good news is the likely increase in popularity of cars with good fuel economies, which will become prime targets for cost-conscious used car buyers. If demand outstrips supply, fleets with a good selection of frugal cars could enjoy an unexpected residual value windfall.

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