Manheim is arguing that although latest figures reveal a continuation of the month-on-month trend towards decreasing fleet sector values, this is in line with a wider movement which has seen organisations holding onto their vehicles slightly longer and driving them harder.
Daren Wiseman, valuation services manager at Manheim, believes it might be time for the market to realign its expectations.
The Manheim Market Analysis demonstrates that, at £7,045, October 2014’s fleet sector value was £679 lower in comparison to October 2013 (a change of -8.8%). Ex-fleet stock is now five months older than the same period in 2013, at 54 months compared with 49 months, while average mileage has increased from 55,547 to 62,663 miles (or 12.8%). According to the Manheim figures, this is the highest mileage the ex-fleet sector has seen since the start of 2014.
Looking at month-on-month data, ex-fleet stock achieved selling prices £90 (or 1.3%) lower than the comparable figures from September 2014. It was also, on average, one month older, with an additional 2,099 miles compared with the previous month – an increase of 3.5%.
Wiseman said: “While these figures do highlight a downward trend in fleet sector values across 2014, the numbers are in line with the age and quality of the vehicles being offered as well as the wider market conditions. In addition, record registrations in the new car sector have led to an influx in part-exchange vehicles from the retail sector, which has delivered increased competition for ex-fleet stock in the wholesale markets.
“It is clear that the market may need to realign expectations over the coming months; however, values are still performing much higher than in both 2011 and 2012. This is positive news for the ex-fleet sector, as it shows that the market is on the recovery journey post-recession. Indeed, while average values have fallen during 2014, the overall demand trend means that vendors who price their stock accordingly will continue to see strong conversions.”
Looking at Manheim’s Market Analysis in more detail, three of the seven segments analysed actually saw an increase in selling price, month-on-month. This included the medium family segment, which makes up the largest proportion of ex-fleet stock – which saw an increase in selling price of £135 (or 2%), despite a corresponding increase in mileage of 1,588 (or 2.6%). The other models showing a month-on-month increase in price were 4x4 and MPV vehicles.
Wiseman concluded: “Ex-fleet vehicles have behaved largely as expected throughout 2014, and the seasonal shifts in pricing show that the market is operating within the confines of what could be called ‘normal’ conditions. Looking forward to the end of the year and into 2015, we can expect to see continued stabilisation. The latest figures suggest that British economic growth slowed in the third quarter of 2014, and many businesses will be putting off decisions until the General Election next May. As such, it is important for vendors to recognise the wider market conditions when it comes to pricing stock.”