Fleet News

Good values ahead for luxury models

Alongside 80 guests from the rental and leasing industry, finance providers and end users at the new Audi A6 launch I decided to look at the sector into which this car is being launched in the UK in June.

There are three main competitors – BMW 5-series, Jaguar S-Type and Mercedes Benz E-class – although it is possible to argue for the inclusion of Saab 9-5 and Lexus GS300.

Although this is a small sector, these manufacturers see a need to bridge the gap between the upper medium, such as 3-series and large executive such as the 7-series.

Audi has high hopes for the new A6, with its user-friendly styling, wide range of engines and choice of two-wheel drive or quattro.

But in reality it is the smaller versions of these cars that have attracted the most attention in the new and used markets in recent years, reflected not only by volume but secondhand prices.

For example, 2003 saw 34,500 A4s sold in the UK, compared to 8,800 A6s. BMW sold 65,500 3-series, compared to 13,140 5-series and Mercedes-Benz sold 34,700 C-class – including coupes and cabriolets – with E- class selling 13,140, which includes 7,500 of the old model.

Jaguar sold more X-Type, than S-Type.

Demand is strongest in the used market for the smaller models and this preference is reflected by prices. Looking at CAP Black Book, a three-year-old A4 1.8T SE, at three years and 60,000 miles, is worth £9,950, whereas a similar spec A6 is £8,600.

A similar picture emerges for BMW, with a 320i SE at £11,500 and a 520i SE slightly behind at £11,400.

The same goes for the two Mercedes, with the C-class at £12,400 and equivalent E-class at £11,800. However, according to CAP Monitor, new 5-series, E-class and A6 will enjoy higher future used values.

The three-year/ 60,000 mile forecast for a BMW 320i stands at £9,325, with a 520i SE at £12,500.

The Mercedes-Benz C-class 200K Elegance will be worth £9,375 compared to £12,025 for a similar E-class. The current A6 2.4SE has a future value of £8,075 and this has leapt for the forthcoming model to £9,900.

Without new equivalent smaller models, it is not possible to ascertain whether there is a change in the pricing relationship between the two sectors in these cases but the uplift on values for the new variants of the larger models should inspire confidence in buyers wanting to put some luxury on to their fleet.

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