Fleet News

Stay below 60,000 miles fleets told

Car buyers are continuing to discriminate against de-fleet vehicles with mileages over 60,000 miles.

Trade prices and mileages of over 200,000 vehicles were compared and it was found that, for the average three-year-old car, the highest falls in value are apparent between 60,000 and 100,000 miles.

EurotaxGlass’s used as its benchmark a three-year-old car with a typical 40,000 miles.

If the same make, model and age of car had covered 50,000 miles, the trade value would be 4%.

However, from 60,000 up to 100,000 miles, the financial penalty increases to 5% for each multiple of 10,000 miles.

“As soon as a car passes the 60,000 mile threshold, the penalties increase because perceived desirability falls,” comments Adrian Rushmore, managing editor at EurotaxGlass’s.

"There remains an additional stigma attached to a used car with more than 100,000 miles, and many owners avoid passing through this psychological barrier during their period of ownership for fear of instant devaluation.

"The fact is that the rate of depreciation actually slows after this threshold has been reached."

Using the same example of a three-year-old car, beyond 100,000 miles the additional fall in trade value for each 10,000 covered reduces from 5% to 3%, and this figure drops again, to 2%, after 200,000 miles.

EurotaxGlass’s also found that cars with below-average mileage do not benefit from an improvement in trade value comparable in scale to the penalty incurred where mileage is above average.

Again, taking the example of the typical three-year-old used car, for each 10,000 miles under the expected 40,000, the trade value improves by just 2%.

Historically, higher mileage diesel cars shed less of their value than petrol cars with the same mileage, but this is now no longer true says Rushmore.

"The price adjustments for diesel cars in respect of mileage now generally follow the same pattern as petrol cars.

"Up until 18 months ago the penalties for diesel models were smaller, but then so too was the supply."

The fluctuation in the supply of used cars throughout the year affects the prices that will be paid.

"During times of high supply - usually in the wake of the two annual registration plate changes - the trade discriminates against high mileage cars," said Rushmore.

"Conversely, in the first three months of each year there is usually less choice, and so prices creep back up."

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