Fleet News

SUV decline predicted

SPORT utility vehicles, which have benefited from impregnable residual values over the past few years, are likely to finally see used prices drop during the rest of the year.

With new SUV sales increasing over the last three or four years, more are now coming on to the used market, balancing out supply and demand, which is having the effect of lowering prices, with levels expected to ease.

According to residual value experts at EurotaxGlass’s, the drops will be seen in the UK and throughout Europe as well, and are likely to affect even prestige models.

Martin Verrelli, head of the EurotaxGlass’s Market Intelligence Unit, said: ‘The limited supply of used SUVs has been critical to the strength of their residual values.

‘While we expect the values of SUVs to continue out-performing those of most other segments, their greater abundance will mean they are likely to depreciate at a faster rate than we have seen in recent years.

‘There will be a record number of new car launches in 2006 and the SUV segment will see more of these new arrivals than any other. With demand for new cars weakening in much of western Europe, dealers are widely expected to register a greater number of ‘demonstrator’ cars in order to meet car makers’ sales targets.

‘That could well undermine prices of nearly-new SUVs and consequently also put added pressure on values of older models, too.’

Prestige SUVs with a diesel engine, automatic gearbox and satellite navigation will be most likely to resist the RV drop, according to EurotaxGlass’s.

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