Traditionally firms extend leasing contracts when they are uncertain about the future and do not want to commit to long-term contracts, so the change indicates growing business confidence.
The findings were revealed in Manheim’s latest Market Analysis, revealed this month, which showed that while there has been an increase in overall used car volumes in the third quarter to October, demand from buyers is varies across the sector.
The report tracks movement across more than 80,000 cars sold through Manheim’s UK wholesale remarketing channels. Prices for petrol and diesel models rose by 2.1% and 2.3% in the quarter when benchmarked against CAP Clean prices, but still remained just below the 100% benchmark.
Prices for manual cars rose 2.6% against CAP Clean, while prices for automatics were up 1.2% for the quarter.
But while automatics were practically reaching their CAP benchmark, manuals were just below 100%.
But conditions are tough for fleets that are not marketing cars in the best condition. The report warned: ‘Fleet vendors, who have seen buyers become more selective in harder trading conditions this year, have continued to feel the effect of selective purchasing which is reflected in the continued 19-day stock turn. Both age and mileage of stock from the major fleets continues to reduce, suggesting a tail-off in the number of lease extensions.’
Manheim Market Analysis is the firm’s new tracker report providing Manheim customers with used vehicle market trends and comment.
Based on actual sales, it analyses demand and prices achieved, along with age, mileage and stock turn profiles.
The report also showed that dealers continued to turn their non-required part exchanges into cash more quickly than any other sector, at just five days fro availability. A Manheim spokesman said: ‘Quickly cashing out of what they don’t want and turning these funds into selected retail stock for the forecourt is a practice many have got off to a fine art.’
Changing vehicle sales patterns
|Q3 2003||Q4 2003||Q1 2004||Q2 2004||Q3 2004|
|Average selling price||5,705||5,543||6,019||5,686||5,698|