Fleet News

Another fall for used car values - but upper medium sector is up

USED car values are down by more than 4% for the sixth consecutive month, but upper medium sector vehicles are bucking the downward trend, according to the latest index from CAP Motor Research. Year-on-year trade prices fell last month by 4.4%, while month-on-month values registered a 4.3% rise due to a change in letter as cars in the used car price index were registered in August 1996.

CAP says the 'market continues to bump along the bottom rather than substantially worsen - indicating a degree of stability'. However, it warns that prices are falling amid trade fears of being exposed to large stockholdings as a consequence of this month's V-plate part exchange deals. Surprisingly the rise in fortunes of Ford Mondeo and Vauxhall Vectra-sized vehicles makes the sector the only one aside from city/mini cars showing an overall rise in values.

CAP chief economist Mark Cowling said: 'The rise in values for upper medium cars is relative to other sectors, rather than absolute, but it does constitute a degree of trade faith in what have been among the recent worst performers in the market. The used car buyer's desire for economy, along with the improved specification of lower medium sector cars tempting customers to downsize is one reason. But now values have fallen, many upper medium cars represent such good value that demand for them has been significantly stimulated.'

The 'stability' view was echoed by Adrian Rushmore, chief car editor of Glass's Guide, who said, 'relative stability' would ensue in the first half of September. But, he warned: 'Thereafter, we can expect prices to fall more rapidly due to increased supply from part exchanges, rental de-fleets and self-registered V-plates. This will coincide with a growing hesitancy by the trade to buy for stock.'

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