Fleet News

RV fears over high emission fleet cars

RESIDUAL values could suffer as company car drivers hand back high emission vehicles to avoid tax increases under the new carbon dioxide-based company car tax regime, used car experts warn.

Although there will not be a flood of early car returns, there is expected to be a 'noticeable' shift which could affect the used car market, says Glass's Information Services.

Adrian Rushmore, managing editor of Glass's Guide, said: 'The average driver will not appreciate the full monetary impact on his or her disposable income until the salary deductions are made when the tax is introduced.

'It is not likely that we will see a flood of environmentally unfriendly cars from disaffected drivers being offered to the used car market, but it is possible the effect will be noticeable. These cars will be offered to the trade in the quieter months of May and June when prices ease back anyway.'

Already fleets have been warned to expect falls in residual values over the next three years, because of chronic oversupply in the used car market caused by the latest year of record new car sales.

Rushmore said that although prices ended up 2% higher year-on-year in December, he predicts there will be a marginal fall during the next 12 months.

'However, the message for 2002 is an upbeat one and there is nothing on the horizon that is as menacing as we have seen in recent years, so 2002 should be a year of opportunity rather than threat,' he said.

His comments were backed by CAP Motor Research, which said there was 'genuine excitement' about the start to the year.

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