Fleet News

Risk to used car prices

The state of the economy and in particular the housing market may hit residuals values.

Some leasing firms have privately expressed fears that the coming months could be extremely tough, with used values dropping and thousands of cars remaining unsold.

Recently, EurotaxGlass’s reported that the weakening in trade demand and prices was more ferocious than expected.

However, Colin Whelan, business research manager at CAP, said any talk of a “glut” of cars remaining unsold is alarmist.

“Leasing companies are experienced in these patterns and while we are in no position to comment on the likely impact of a period of weaker used car prices on leasing rates, significant alterations to rate books seems an unlikely response to a seasonal market slowdown,” he said.

In its quarterly Pulse report, BCA said despite ongoing uncertainty in the economy, average prices for used cars continued to rise in the third quarter.

However, September was weaker than both 2006 and 2005. It said values for fleet and lease vehicles rose to £7,345 in September, nearly £400 more than August.

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