Used vehicle buyers are travelling further and
turning more to the open market to secure stock in an ‘unusually
stable’ second-hand sector while CAP go mobile themselves.
Although used car prices tend to drop
approximately 3% at this time of year, the latest edition of CAP
Black Book has recorded a drop of only 1.5% (for a typical
three-year-old or 60,000-mile car) on the back of reduced consumer
demand and available vehicles.
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Poor sales of new cars in recent years has
meant a lack of retail-worthy part exchanges and franchised dealers
of both used cars and vans are buying in vehicles “hundreds of
miles apart” according to Ken Brown, editor of CAP Red Book, the
light commercial vehicle equivalent of the Black Book.
While trade dealers in the car market are
being forced into competition against independent used car
specialists to maintain sufficient stock, van dealers have become
squeezed by internet “cherry picking” bidders for lower mileage
vehicles, said Brown, although values have slightly increased in
the light commercial vehicles.
Independent dealers, which have previously
held more freedom to vary their stock compared to groups or
franchises, are now finding their margins under greater pressure as
the franchised dealers are buying cars and selling at reduced
prices in the open market to compete.
Tim Bearder, Black Book editor, denied the
figures warned of a market failure: “We continue to see no evidence
of anything like that. As long as supply remains in line with
expectations and retail demand is maintained somewhere around the
reasonable levels currently reported, this month will be stronger
than is often typical for the time of year.”
CAP attributes the shortage of second-hand
vehicles to the low number of new registrations three years ago and
the rise in online auction sales in the past year.
“Last month we independently assessed the
condition of a large number of entries only to find no discernable
relationship between price and condition when they were sold,” said
Brown of the used van trade. “This is good news for vendors who can
expect values to continue rising.”
It’s also good news for CAP who have launched
of a mobile version of the Black Book for the two leading
smartphone operating systems, Android and iPhone. The mobile Black
Book will offer subscribers portable access to the monthly industry
values, downloaded straight to the device at the same time as the
publication of the printed book. CAP will continue to offer the
Valuation Anywhere service which requires an internet
connection.
richard.brown@vrlfinancialnews.com
