CAP Network claims that as new car sales are enjoying record successes, they are leading to excess supplies of used cars. The findings are backed up by residual values experts at PLEX Publishing who say that few high volume models have escaped a drop in values. New car prices are continuing to rise but used car values have begun to slide, with 'repmobiles' taking the biggest hits.
Although CAP reports that average residual values increased by 0.2% in May, secondhand cars have lost an average of 0.7% in June due to high levels of supply across the used market. CAP says these situations lead to major pressure on prices and that in June the trade appears nervous about the short term future.
June's overall decline is only the second recorded over the last year, and has been prompted by poor performances in the lower-medium, MPV and 4x4 sectors, while the biggest losers remain upper-medium cars, losing 3.8% of their value compared with June 2001.
Superminis and sportscars are also now in deficit, by 3.3% and 0.9% respectively.
CAP economics editor Ramesh Notra said: 'While the new car market remains buoyant there are few customers for used cars at the moment.
'A combination of the early holiday season, the World Cup and even the recent Jubilee celebrations has dampened interest in major purchases like cars at the moment.
'But this is exacerbated by the unusually high numbers of cars from fleets which are hitting the open market.'
John Coates, editorial director of PLEX Publishing, said: 'The slump is general across the high-volume sector, and covers all shapes and sizes from family cars to superminis and small hatchbacks.'