Analysis
Jigsaw Finance’s Nigel Hawkins gives his observations on the PCP market
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The recent downturn in used vehicle prices is being blamed on more part exchanges being taken in by franchised dealers following effective finance-led new car programmes offered by manufacturers. As a result, the demand to source quality newer stock from auctions has diminished, coupled with dealers now sending the older part exchanges to auction resulting in greater overall depreciation.
Car supermarkets and independent dealers appear to be benefitting from the lack of need for the franchised dealers to buy cars from auction.
Market analysts believe we will see more typical downward adjustments as the volumes of used cars begins to diminish.
All bodes well for consumers as their part exchanges are being sought by independent dealers putting them in a strong position to drive stronger deals.
There is still a view that consumers are currently looking to fuel-efficient smaller compact cars. It will be interesting to see whether the currently buoyant new market will continue as strongly as it has and whether more competitive finance-led offers will continue to be offered to continue the momentum.
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