Fleet News

Plate change threatens residual values

LESS than two years after the introduction of bi-annual registration plate changes another new system is threatening to damage short-term residual values. Industry forecasting guide CAP Monitor has warned new cars coming into the second-hand market after the new plate is introduced will seem older and more dated then they would otherwise have appeared under the current system.

The launch of Y-plate vehicles on March 1 signals the end of the existing twice-a-year plate change. On September 1 a new system will be launched using two letters followed by two numbers to show the area and the date of initial registration. A space and then three random letters will follow these four characters and so retaining the seven-character profile. The new age identifier will continue to change twice a year in March and September. But Mark Norman, editor of CAP Monitor, warned that two-year-old cars could look 'five plates old'.

'Cars being bought now on short-term leases which are intended for disposal after September will be competing in the nearly-new market with vehicles bearing a completely new style of plate. In comparison they will be less desirable,' said Norman. He also warned the new plates could disrupt buying patterns with many company car drivers attempting to delay the renewal of their lease so that their replacement car has the new plate.

However, Adrian Rushmore, chief car editor of Glass's Guide, said the car buying market could in fact be given a boost with drivers rushing to get their hands on the new plates. Rushmore supported the view that in the short term residual values could be unsettled, saying: 'The effect on residual values for cars bought in September with new plates will be mildly disadvantaged in the short-term.' But he added that the new plate system would not concern the contract hire industry or fleets with traditional three- or four-year replacement cycles because vehicles will not hit the used car market for three or four years.

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