Fleet vendors’ conversion rates have fallen to around 60-65%, according to the Vehicle Remarketing Association (VRA).
The Association has attributed the slump, in part, to ‘attractive’ PCP alternatives available to car purchasers, as well as a restricted mix of vehicles returning from the fleet sector to the second-hand market. However, the lower average mileage of ex-fleet cars may indicate fleets are currently less likely to extend vehicle service periods, according to British Car Auctions (BCA).
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Particularly, the rise in car registrations at franchised dealers in both March and April has included a growing number of part-exchanges in PCP deals, keeping dealers’ used stock high without having to turn to the wider second-hand market, the VRA has said. Cars taken in PCP exchanges are typically two or three years’ old, filling the gap between the ever-fluctuating nearly-new sector and the three- or four-year-old ex-fleet sector.
Much as vehicle valuation firm CAP reported earlier this month, VRA members expect used values to drop in the near future, by as much as 8% over the next six months.
richard.brown@timetric.com
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