Fleet News

Fleet pushes used market to record high

THE market for defleeted cars is stronger than at any time since the turn of the millennium, with private buyers turning away from new cars and opting for ex-fleet used vehicles instead.

The total value of used cars sold is now greater than that of new vehicles – the first time this has happened since the 1990s. For fleets, it means there are more potential buyers spending more money than ever, strengthening residuals values across most sectors of the market.

According to BCA’s annual report, The Used Car Market, the market for secondhand cars was worth more than £32 billion in 2005, up from £30 billion in 2004. The number of units sold broke the seven million barrier.

The report, produced in association with Sewells Information & Research, claims a key reason for the rise is due to the record levels of new cars sales in the past few years. As many highly-specified fleet cars come back onto the used market, buyers are opting for them rather than new cars.

BCA’s commercial strategy and communications director Tony Gannon said: ‘Motorists want good value, well-specified cars and the fleet and lease sector delivers exactly this type of product.

‘This is typified by the huge demand in the three to five-year- old sector. Volumes rose by 10.9% to record levels at 2.11 million, representing nearly 30% of the total market. The most decisive factors for used car buyers are price, make/model, low mileage, age of car, body type and specification.

‘The resilience of the used car market is particularly encouraging, given this year’s downturn in new vehicle sales as well as the general pressure on consumer spending.

There’s strength in depth in the used car market and this must be reassuring for any organisation operating within it.’

Defleeted diesel cars can expect a second lease of life, according to the report. Many buyers will consider a diesel when they come to choose their next used car.

Gannon explained: ‘With new diesel volumes more than doubling over the last four years, reaching 898,000 units and 36.8% of the market in 2005, there have been concerns in some quarters about diesel residuals.

‘The report anticipates that sales of diesel-powered used cars will rise steeply, with 22% of motorists saying they will choose a used diesel car next time they buy and a further 3% saying they will seek out a nearly-new diesel.

‘This means in a typical year with around seven million used cars sold, there will be demand for about 1.75 million diesels – nearly twice the volume that enter the market as new cars.’

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