Fleet News

'Tug of war' puts values in turmoil

AUCTIONEERS are being stretched by a 'tug of war' between buyers and vendors that that makes it difficult for fleet managers to make true sense of the current used car market.

Unpredictable buying patterns dominate the market so that what seems reasonable one day and attracts a lot of interest can be shunned by buyers the next.

Andrew Shepherd, senior group auctioneer at Manheim Auctions, warned: 'To value a vehicle at the moment, you may as well put 20 prices in a bag, shake them up and see what comes out.

'Trying to make sense of today's used car market is similar to trying to make sense of recent World Cup results. Having recently seen four buyers 'fighting' over a white car in average condition and achieving over CAP clean resembles Senegal making the quarter finals! Could you predict that?'

Part of the fast pace of change in the market is being driven by two new registration plates per year, according to CAP Network.

Last week, Martin Ward, CAP national research manager and Fleet News columnist, said the speed with which cars seemed to become 'old', for example Y-plate vehicles, was hurting their residual values.

The only winners in the market are fleets that can offer unusual or rare vehicles.

Shepherd said: 'Unusual, individual spec vehicles are making up to £3,000 over CAP clean.

'However, general makes and models in good condition are achieving CAP average plus. Vehicles with 80,000 to 150,000 miles are achieving whatever the market dictates they are worth at the time of sale. With the present level of stock available, it is very much a buyers' market.'

Likening the situation to a tug of war match, he said: 'First the vendors 'pull' the buyers with the quality of stock offered, then the buyers 'pull' the vendors by dictating just how much their vehicles are worth. Then the vendors 'pull' the buyers by trying to maintain their residuals, then the buyers 'pull' the vendors by offering market price bids and the auctioneer is the umpire to oversee fair play.

'I have no real answer to the fluctuating prices and interest at the moment – I can only repeat that vendors need to be vigilant and to react to each market each day.'

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