Fleet News

Used market recovery continues . . . but for how long?

DISPOSAL experts have dismissed fears that the bubble of strong residual values over the past few months could be about to burst. Manheim Auctions has warned that following this month's plate change residual value growth could end, leading to a short term fall in RVs.

But CAP Motor Research has thrown cold water on the claims of a new collapse, saying the industry is strong enough to cope with what the near future may hold. According to Manheim, low mileage, good condition vehicles are in demand, achieving 100% of CAP 'clean' prices. A number of three to six-year-old models in good condition with 90,000 miles are also fetching above average prices, which Manheim say should continue to the end of March.

However Andrew Shepherd, senior group auctioneer, believes the present market will ease off in April. 'Buyers are not quite falling over each other to bid and there are signs that prices have eased slightly,' he said. Adrian Rushmore, chief car editor for Glass's Information Service, agreed with Shepherd's comments but added: 'The market is not about to disappear into a black hole. There is an underlying confidence in the market which will carry through a period of reduced retail activity but there will be a short term resurgence following the general election.'

His comments were supported by Ramesh Notra, CAP's senior economist, who said the recovery in the used car market was accelerating thanks to strong retail activity. He said: 'It's not a case of the bubble bursting. The market had a lot of ground to make up at the start of the year. It's more a question of how market growth in residual values will level off.'

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