Higher Used Car Depreciation Predicted for 2006
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EurotaxGlass’s, publishers of the Glass’s Guide to Used Car Values, is predicting a modest rise in rates of used car depreciation during 2006. This is expected to result from a continued slowdown in sales of new and used cars, coupled with an increase in the supply of nearly new vehicles entering the used market.
"There have been falls in sales of new and used cars over the last 12 months and we can reasonably assume that retail sales will continue to be less active through much of 2006," comments Adrian Rushmore, Managing Editor at EurotaxGlass’s. "This will have a negative impact on used car prices, albeit to a lesser degree than in the aftermath of the mini consumer boom in 2004."
Price falls are likely to be aggravated by the oversupply of new vehicles, where excess unsold stock is registered and then retailed as ‘used’ after three months. "The practise of selling three-month-old cars is widespread amongst franchised dealers, and all the signs point to even greater volumes of these nearly new cars being pushed onto the used market in 2006," adds Rushmore.
With over 120 all-new model ranges arriving in 2006 – more than in any previous year – carmakers have high expectations that new models will compensate for the loss of sales from established product lines. However, most forecasters are predicting registrations to fall by around 2.5 to 5 per cent, increasing the prospects of oversupply. "This would lead to lower residuals for one, two and possibly three-year-old cars this year," says Rushmore.
The values of one-year-old cars fell by around £500 in 2005, while those of three-year-old vehicles remained firm by comparison. "This narrowing of price differentials can only continue for so long, because at some point retail customers will perceive the younger car to be better value for money. It is at this stage that prices for three-year-old cars are likely to suffer."
Without the distress marketing of more new cars this year, EurotaxGlass’s says the market would suffer only a moderate downturn in used car prices. "However, we fear that the pressures will intensify and the ripple effect will extend to the three-year-old car. Nevertheless, it currently remains the case that younger the car, the greater the instability of prices."
Research Material:
About EurotaxGlass’s
William Glass first published Glass’s Guide to Car Values in 1933 and July 2003 marked 70 years of the motor trade’s ‘Bible’. In 2000 Glass’s merged with Eurotax, forming EurotaxGlass’s - Europe's leading supplier of automotive business intelligence across 28 countries. The merger has created a group with unrivalled resources and knowledge.
Today, EurotaxGlass’s offers products and solutions that are essential at every stage of the vehicle lifecycle – from valuation, technical and fleet management data, through to estimating, bodyshop and dealer management systems and web-based services. Recent developments include valuation data for consumers – offered via the Glass’s Motoring Guide website (www.glass.co.uk) – and the pan-European Market Intelligence Service that provides bespoke data and analysis for the industry at large.
Web Site:
Keywords:
Auto | Autos | Automobiles | Auto News | Car | Cars | Car Values | Consumer | Depreciation | Market | Markets | Market Intelligence | Sales | Used Car | Used Car Values | Value | Values | Vehicle | Vehicles | UK | United Kingdom
"There have been falls in sales of new and used cars over the last 12 months and we can reasonably assume that retail sales will continue to be less active through much of 2006," comments Adrian Rushmore, Managing Editor at EurotaxGlass’s. "This will have a negative impact on used car prices, albeit to a lesser degree than in the aftermath of the mini consumer boom in 2004."
Price falls are likely to be aggravated by the oversupply of new vehicles, where excess unsold stock is registered and then retailed as ‘used’ after three months. "The practise of selling three-month-old cars is widespread amongst franchised dealers, and all the signs point to even greater volumes of these nearly new cars being pushed onto the used market in 2006," adds Rushmore.
With over 120 all-new model ranges arriving in 2006 – more than in any previous year – carmakers have high expectations that new models will compensate for the loss of sales from established product lines. However, most forecasters are predicting registrations to fall by around 2.5 to 5 per cent, increasing the prospects of oversupply. "This would lead to lower residuals for one, two and possibly three-year-old cars this year," says Rushmore.
The values of one-year-old cars fell by around £500 in 2005, while those of three-year-old vehicles remained firm by comparison. "This narrowing of price differentials can only continue for so long, because at some point retail customers will perceive the younger car to be better value for money. It is at this stage that prices for three-year-old cars are likely to suffer."
Without the distress marketing of more new cars this year, EurotaxGlass’s says the market would suffer only a moderate downturn in used car prices. "However, we fear that the pressures will intensify and the ripple effect will extend to the three-year-old car. Nevertheless, it currently remains the case that younger the car, the greater the instability of prices."
Research Material:
About EurotaxGlass’s
William Glass first published Glass’s Guide to Car Values in 1933 and July 2003 marked 70 years of the motor trade’s ‘Bible’. In 2000 Glass’s merged with Eurotax, forming EurotaxGlass’s - Europe's leading supplier of automotive business intelligence across 28 countries. The merger has created a group with unrivalled resources and knowledge.
Today, EurotaxGlass’s offers products and solutions that are essential at every stage of the vehicle lifecycle – from valuation, technical and fleet management data, through to estimating, bodyshop and dealer management systems and web-based services. Recent developments include valuation data for consumers – offered via the Glass’s Motoring Guide website (www.glass.co.uk) – and the pan-European Market Intelligence Service that provides bespoke data and analysis for the industry at large.
Vcheck” for buyers of used cars, vans and motorbikes.
“Vcheck”, matches registration number and VIN number of a vehicle by checking the DVLA information. It then checks that it’s not stolen or written off by accessing the data from Association of British Insurers (ABI) and official Police (PITO) vehicle data across the UK.
Last year 497,630 were written off (source Vcheck ABI Category 1-4 insurance write-offs) and over 350,000 were stolen (source Vcheck PITO). Figures show that every 20 minutes an unsuspecting car buyer drives off having bought a stolen vehicle.
Before you buy it, Vcheck it! Vcheck costs only £19.95!
Web Site:
- www.eurotaxglass.co.uk (trade)
- www.glass.co.uk (consumer)
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Keywords:
Auto | Autos | Automobiles | Auto News | Car | Cars | Car Values | Consumer | Depreciation | Market | Markets | Market Intelligence | Sales | Used Car | Used Car Values | Value | Values | Vehicle | Vehicles | UK | United Kingdom
posted by Jon Fry at 3:12:00 AM
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