Fleet News

CAP chief tells fleets to adapt for success

A DECADE of change has radically altered the landscape of the used car market according to new research – and fleet decision-makers must adapt to get the best value for their vehicles.

Research by residual value expert CAP has revealed the seismic effects of new car price changes and upheaval in the used car market on the running costs of typical fleet cars.

Ten years ago a Ford Sierra 1.8 LX would retain 36% of its value over three years and 60,000 miles, or £3,425, but today, a Ford Mondeo 1.8 LX retains just 22% of its value at £3,375 over the same period.

The same is true of the Vauxhall Astra, which in 1.4 LX guise retained 36% of its value, or £3,200, 10 years ago, but an equivalent 1.4 LS today would keep £3,275 or 25% of the vehicle's value.

A Nissan Micra 1.0 GS 10 years ago retained 37% of its value at £2,500, while the equivalent model today keeps 27% or £2,425.

The main force of change has been an increase in the new price of cars, while used values have remained relatively level. There are winners, however, with the BMW 320i SE valued at £6,000/36% at the benchmark three year/60,000 miles a decade ago, while today, an equivalent 318i SE would cost £9,600/47%.

Mark Cowling, publishing director of CAP, speaking at the 10th annual conference of the Institute of Car Fleet Management, said the changing market required a skilled approach to get the best value from disposal stock.

He said: 'Fleet decision-makers need to be aware when buying cars that eventually they have to go to used car buyers. There needs to be a better balance of cars coming to the used car market. See what people are talking about and ask yourself whether you would drive some of the cars your staff are ordering.'

Key strategies would include creating choice lists for drivers with the used car market in mind. This would include matching specification levels to meet expectations of used car buyers and taking advantage of seasonal demand pattern in the market.

Cowling added: 'Decision-makers have to understand the requirements of used car buyers as much as fleet drivers and then choose their disposal routes carefully.'

Leave a comment for your chance to win £20 of John Lewis vouchers.

Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

Login to comment

Comments

No comments have been made yet.

Compare costs of your company cars

Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

What is your BIK car tax liability?

The Fleet News car tax calculator lets you work out tax costs for both employer and employee