Fleet News

Warning as 'ageing' current models face falling residuals

FLEET vehicles are 'ageing' faster as manufacturers gear up model replacement cycles to hold buyers' interest. But, according to CAP Motor Research, manufacturers could be damaging fleet residual values as used vehicles tend to be worth less if they are not the current model.

Mark Norman, editor of CAP Monitor - Future Residual Values, said: 'Used cars tend to retain their value best when they are a current model. There is a large element of fashionability in the car market and when the car is superseded, it becomes an 'old' model and its value falls away.'

According to CAP's database, in the first nine months of 1999 1,550 model variants have been introduced, compared to 1,400 during the whole of 1998. Production cycles have dropped from an average of seven years to four or five as manufacturers constantly seek to keep their products fresh.

Therefore, fleet managers will have to juggle their buying cycles more carefully to get the best residual values for their fleets on disposal. But even then, more frequent updates from manufacturers are dating fleets more quickly. Although manufacturers have always introduced updates to their ranges, the speed with which they are implemented is increasing as the life-cycle of each model shortens.

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