A DECLINING used car market should prompt fleets to act more cautiously over residual values during the year, it is claimed.

Henley Autodata warns that there is a general overconfidence among many fleets when it comes to used vehicle values.

Operations director Martin Keighley said: ‘Remarketing is relatively simple when the market is strong but during more difficult times, as expected in 2005/2006, the task is expected to become far harder.

‘The fact is that most analysts are predicting new car registrations of about 2.4 million, which is slightly down on last year.’

He added that Henley executives believed the actual registration figure could top three million when all the new car launches and facelifts for 2005 were taken into consideration. That meant there could well be a lot of cars left over by the end of the year, leading to some serious sales inducements which would have a knock-on effect on used car values.

The company also expects that a general election in May could have a depressing effect on used values in the weeks prior to it.

Keighley added: ‘What we are saying is that the industry should be cautious and limit their expectations when it comes to used values.’

However, Graham Smith, general manager of BCA Blackbushe, reckons that buyers are out in force with smaller and lower-medium cars at the top of their shopping list.

He said: ‘January has seen a very active market with large numbers of buyers attending sales at all locations around the country. Conversions are generally good across the board, but don’t take the demand for granted – professional buyers are increasingly focussing on the best-presented vehicles that are ready to be taken away and retailed immediately.’

Professional buyers have been competing strongly for cars in the two to three-year-old age range. The used supermini segment is particularly buoyant, with the Fiesta, Corsa and MINI the favourites.

BCA reports that the Ford Focus, Vauxhall Astra, VW Golf, Peugeot 307 and Renault Megane are also attracting interest from non-trade buyers.

Smith added: ‘Easter comes early in 2005 and this shortens one of the peak selling periods of the year. Allied to this, extensions in the contract hire and leasing industries may see an increase in cars entering the wholesale market that are older and more travelled following the 05 registration in March.’