Motor manufacturers are being forced to introduce deposit contributions on some nearly new car orders in order to make these cars more competitive with the monthly rates available on subsidised new vehicles, Glass’s has said.
The data provider said the move followed a number of manufacturer dealer councils complaining that it was difficult for them to make used PCP prices competitive.
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Rupert Pontin, Glass’s head of valuations, said: "Franchise dealers were finding themselves in a position where the monthly PCP rate on a 12-month old car was only a few pounds less than a new one. This made the used stock tricky to move using this crucial finance method."
Pontin said there were nearly twice as many pre-registered vehicles in the market as there were 12 months ago, meaning there were a large number of nearly new cars on dealer forecourts. At the same time, manufacturers remained keen to keep plants working at near capacity, meaning they are pushing attractive finance deals for new vehicles.
Pontin said this had the potential to have a domino effect down the market. "When this many nearly-new cars are around, their values inevitably come under pressure and there is a domino effect on two, three and even four-year-old vehicles.
"Certainly, the level of pre-registrations that we are now seeing from some manufacturers are having an effect on their values across the market but it is difficult to see the situation changing in the short-medium term. You cannot simply change the flow of vehicles being manufactured that quickly."
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