Fleet News

Forecourt checks could improve vehicle residual values

FLEET decision-makers could improve vehicle residual values by hundreds of pounds per car by researching the prices used car dealers are charging on their forecourts. Research into the used car market has shown that the average price of a three-year-old car sold by dealers has risen by £200 in a year.

The figures are revealed in The Used Car Market 2002, a report by BCA Europe, in association with Fleet News' sister company Sewells International.

In contrast, last week the CAP Index revealed that the average value of three-year-old cars was down 9.3% year-on-year.

The price differential could be explained by the investment dealers have to make in returning vehicles to showroom condition, as fleets often lose money because they put vehicles up for sale without basic preparation.

However, fleet decision-makers who simply benchmark their vehicles against guide prices could be underestimating how much they could raise at disposal time.

The BCA report revealed the overall price of used cars offered by dealers fell by £355 to £5,739 in 2001, but this was driven by a collapse in the amount asked for vehicles aged over six years.

Figures comparing 2001's market with 2000 show that dealer prices for cars aged between 0-2 years-old have risen by an average of £187 to £9,597, while prices for three-year-old cars rose by £199 to £6,610.

By contrast, the six to eight-year-old market fell £579 to £3,750, and the nine-plus year-old market fell £160 to £1,655. Overall, the value of the used car market fell by £1.9 billion to £25.4 billion, the report said.

Tom Madden, British Car Auction's director, customer affairs, said: 'The cars fleets operate and put into the used car market are the most desirable in specification and price and these are significant factors for private buyers when it comes to choosing their car.

'Motorists will always want personal transport and used cars offer them choice, quality and value for money.'

  • To order a copy of The Used Car Market 2002 by BCA Europe, priced £99.95 plus £5.95 p&p, or for more information, call 01733 468255.
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