predictions
A disagreement over the direction of the used car market has arisen
between the British Vehicle Rental and Leasing Association (BVRLA)
and market information provider, EurotaxGlass’s.
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Following EurotaxGlass’s statement on January 8 that the value of
an average three-year old car may fall by £400 this year, against
what it was worth in 2007, the BVRLA has come out with a statement
to challenge this notion.
BVRLA director-general, John Lewis expressed his “surprise”
at the news, noting that a drop of such magnitude was not on the
agenda at its twice-annual meeting to discuss trends in the used
car market with EurotaxGlass’s late last year. EurotaxGlass’s is
one of several sources of market information for the BVRLA
“When there is financial pressure on buyers, as there is at
the moment, they tend to move away from new and nearly-new to
slightly older, but well-maintained cars, and to fund them via
dealer finance rather than unsecured bank loans. That’s why we
believe that the three year old market will continue to hold up,”
Lewis added.
EurotaxGlass’s, however, defended its position. A
representative of EurotaxGlass’s said its conclusion was “not
out-of-step” with what was presented and that the BVRLA may have
“misinterpreted” what was discussed at the meeting.
Putting its analysis in context, managing editor Adrian Rushmore
explained:
“Although average trade values increased year-on-year by £450 from
September 2006 to September 2007 the original cost new of these
cars increased at a greater rate of £850.
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By GlobalData “In the final quarter of 2007 it was widely reported that the
market conditions faced by dealers was more challenging, which has
impacted both their sales turnover and profitability. All of this
leads us to the conclusion that a further fall of £400 this year is
realistic,” Rushmore added.
