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Manufacturers urged to prepare for PCP end-of-contract vehicles

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The Vehicle Remarketing Association (VRA) is urging manufacturers to plan ahead for the time when vehicles supplied with a personal contract plan (PCP) are returned.

The message comes as the automotive sector prepares for the key March new car market which some believe could exceed 400,000 units for the first time since 2008, fuelled by the growth of PCP deals.

The percentage of nearly new cars processed through franchised dealer networks is expected to rise significantly as a result of the trend to PCPs.

However, concerns have been raised that manufacturers and their dealer networks might not be resourced to cope and that RVs could be hit if manufacturer finance arms subsequently turn to volume disposals away from the franchised network.

“Personal contract plans continue to drive the new car market forward, with the pattern among consumers moving increasingly to one of use rather than vehicle ownership,” said VRA chairman John Davies.

“As a result, manufacturers will increasingly face responsibility for these end-of-contract vehicles and we are calling for them to plan carefully now.

“Our members are ready to assist in the remarketing process, from providing inspections and vehicle valuations, through to logistics, auctions and online stock locators.

"From our perspective, every used vehicle represents an opportunity to demonstrate remarketing expertise that is envied throughout Europe.”

According to VRA, used vehicle prices are likely to remain high in the first six months of the year, a consequence of the reduction of up to 500,000 new registrations coming to the used market in the years following the recession, coupled with higher consumer demand.

Consumer confidence has improved thanks to falling unemployment and low interest rates and PCPs have extended to the used car market, in addition to defining much of the growth in new vehicle registration figures.

 


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