Fleet News

Quick plate changes are hurting residual values

'Already there are only two more months left of the 02 plate – how time flies under the twin-plate system. Many rental companies are still selling Y-reg and most agree these look ancient for nearly new cars - and that perception is really hurting values.

It has to said, however, that the new plate system has probably been accepted and understood better by the public than was originally expected.

But its impact on older cars has been more severe than anticipated. The aging process for older cars, even those as young as three-years-old, is accelerating. Vehicles on T, V and W plates do look good value and as low mileage nice cars they are highly desirable.

However, people in the market for these have moved up from the five and six-year-year-old bracket and thus left the older stock with fewer customers. Those older cars now look the bargain of the century but older cars still are falling off the bottom quicker than ever before. Those who said the new system wouldn't make any difference to used car values must now realise how wrong they were.

Satisfying the cherry pickers

The trade is still cherry picking – and this is evident in every disposal channel. It is shying away from cars that need work, either mechanical, body or what is now being regarded as a major investment, the interior.

A few cigarette burns, scuffs or bits missing, either through misuse or lack of attention through its life, are costly to repair. The trade does not want to buy cars that will immediately disappear into the workshop while values continue falling.

The trade does like well-prepared vehicles and this applies to light commercials too. As has been said so many times, it is usually worth investing in small repairs inside as well as out.

The absolute minimum should be the three Ws – wash, wheels and windows. This always lifts the car's appearance.

Cars are like any other consumer goods. Look at the apples in your local supermarket. If they are well prepared and shiny you are more likely to buy than if they are dull and damaged. In the trade at the moment, there are more than enough rotten apples.

Estates still finding favour

One type of vehicle that has always been popular with the public down the years is the good old estate, formerly known as the Traveller, for those old enough to remember. The name has changed many times for different derivatives over the years – for example Touring, Tourer, Avant and so on, but they are still basically estates. But whatever the current name, they are always desired.

There was some concern that the small people carriers would take over from estates in the popularity stakes and to some extent they have won some ground from their old family predecessors.

But estates have stood their ground and their image and practicality is close to where it has always been. The Traveller back in the 60s was the alternative to a van. Today it is no longer the tool of the travelling salesman, though, and is very much a lifestyle vehicle.

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


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