Friday, December 19, 2008
Possible respite for values of nearly-new cars
Analysis by industry experts EurotaxGlass's has revealed that the volume of nearly-new vehicles being offered for sale at the end of 2008 is around 35 per cent lower than was the case during the same period last year, when supply far exceeded demand. A direct result of far fewer dealer self-registrations, this should mean that values of younger used cars are now less likely to continue to fall as heavily as had been the case just a few months ago.
"In late 2007 the supply of '57'-plated cars significantly outweighed market demand," notes Adrian Rushmore, Managing Editor at EurotaxGlass's. "This year, by contrast, the number of '58'-plated vehicles appears to be more manageable. Many dealers still have on their books a significant number of cars at or just over three months' old, but in general they are not overstocked - at least, not to the extent that they were 12 months ago.
"In particular there are fewer ex-demonstrator vehicles to dispose of, meaning that values of cars of this age may finally begin to come under control after many months of severe falls. They are still likely to continue to decline, as with values of most second-hand vehicles, just at a more gradual rate."
Contributing to the situation are rental companies, who have retained cars for longer periods in 2008 compared to last year, helping to reduce the quantity of ex-rental stock arriving on dealer forecourts. This trend is likely to continue into 2009, and will be exaggerated by the fact that manufacturers are expected to further restrict supply to hire-car firms, thus limiting used car volumes particularly in the second half of the year.
"Longer periods of retention will mean ex-rental cars could have around 20,000 miles on the clock, rather than the more typical 14,000. Whether this suits potential car buyers remains to be seen," concludes Rushmore.
DATED: 19.12.08
FEED: AW
