Fleet News

Careful defleeting stabilises market

THE spring season has seen an unprecedented period of stability in the used car market due to careful remarketing by the fleet industry, claims CAP.

In the latest edition of Black Book, senior editor Tony Styles said: 'This year we have seen a reversal of the usual trend for the spring season, when values previously tended to come under increased pressure.

'It may even be possible that we are seeing more than just short-term factors and that the actual shape of the market may be undergoing some positive change. New car sales have for years been dominated by the corporate buyer. But the recent March figures revealed a slightly different story and private registrations rose by 4% to 53.2%.

'Because private buyers don't exhibit particularly seasonal disposal patterns this bodes well for the stability of the market.'

But the best news for values in the medium and perhaps longer-term is the more careful management of disposals being demonstrated by the industry as a whole.

He added: 'Daily rental operators in particular are no longer moving such large numbers back into the market at set times. In previous years the impact of this on the balance of supply and demand was clear to see from the movements in residual values.'

Adrian Rushmore, managing editor of Glass's Information Services, agreed. He said: 'The supply of ex-rental cars remained well balanced with demand even though buying activity became more erratic. It is quite possible we have seen slightly fewer cars compared to a year ago, which is probably a function of less rental utilisation.'

Styles believes that many company car drivers are extending their vehicle contracts while deciding whether to keep the car or opt for a cash alternative. He believes this is keeping many vehicles out of the March and April market.

He added: 'Today, many disposers are feeding cars out more gradually, resulting in some ironing out of the traditional peaks and troughs. Whether accidental or deliberate policy, they are now reaping the benefits of such an approach. Today's market is hungry but not desperate and it is to be hoped that the results are valued by all to the point that this new apparent stability can be maintained indefinitely.'

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