In the second half of 2004, experts from Manheim Auctions, BCA and CAP warned that many disposers were holding on to cars for too long, costing fleets dear in holding charges and depreciation.
But research by CAP has found that practice is lessening. In the February Black Book editorial, it states: ‘While auction conversion rates are rising, disposers are satisfied to sell at very close to CAP Clean rather than risk holding out for higher bids that may not emerge. This is confirmed by analysis that reveals CAP tracking just 1% above the market. Research in the leasing disposals industry suggests an increase in returns for February and a consensus that market values are unlikely to rise this month.’
It also found that retail activity had picked up after the Christmas lull, with smaller cars doing particularly well, though upper-medium cars had been hit hard again.
It said: ‘Retail activity increased significantly into January, an upturn the market expected following the Christmas lull. However, research indicates that both retail sales and stock purchase activity are currently heavily price-led. Trade value movements also reflect a stronger desire for smaller cars than large family sector and executive offerings. The largest movement is found among upper-medium cars, which are down this month by around 4%.’