Fleet News

Marketwatch: Sales slowdown could impact on RVs

FLEETS have been warned that residual values for typical three-year-old end-of-contract company cars could fall throughout the year due to a predicted slowdown in sales of new and used vehicles.

An increase of nearly new vehicles supplied to the market will also be a major factor in how much money ex-company cars fetch in the auction halls.

Adrian Rushmore, managing editor of residual value forecasters EurotaxGlass’s, said: ‘There have been falls in sales of new and used cars over the last 12 months and we can reasonably assume that retail sales will continue to be less active through much of 2006. This will have a negative impact on used car prices, albeit to a lesser degree than in the aftermath of the mini consumer boom in 2004.’

The company suggests that price falls for used vehicles are likely as a result of an oversupply of new vehicles, where excess stock is registered and then retailed as ‘used’ stock after three months.

Rushmore added: ‘The practice of selling three-month-old cars is widespread among franchised dealers and all the signs point to even greater volumes of these on the used market in 2006.’

EurotaxGlass’s says that with more than 120 new model ranges due in showrooms during 2006, manufacturers will expect those to compensate for the loss of sales from established product lines.

But with many commentators predicting that registrations will fall by between 2.5% and 5% the prospect of oversupply is increased.

The company says the values of one-year-old cars fell by about £500 in 2005, while those of three-year-old vehicles remained firm by comparison.

Rushmore added: ‘This narrowing of price differentials can only continue for so long, because at some point retail customers will perceive the younger car to be better value for money – then prices for three-year-old cars are likely to suffer.’

Online bidders set record

MANHEIM’S Simulcast online bidding service has set a new record. At a Volkswagen sale in Leeds, more than 30% of the 199 vehicles entered were bought by online bidders.

The company said the growing popularity of the service among its customers means it will expand the service throughout the year. It has 12 auction halls with Simulcast technology and holds up to 25 Simulcast sales each week.

Group marketing and planning director Rob Barr said: ‘Between 15 and 20% of all cars offered on Simulcast are now purchased online by remote buyers. This has grown to a very similar level to our business in the USA where we operate Simulcast on a much greater scale, with up to 100 sales each day.’

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