CAP reports stability in used car trade
According to the latest edition of CAP Black Book, supply and demand remain balanced in the used market, which has meant values slightly increasing at 3yrs/60,000 miles in every sector, with the start of the convertible season heralded by an average rise of 2.6%.
It said: ‘Key to the current market dynamic is the ongoing fragility of the new car sector and dramatically reduced short-cycle business – the traditional cause of oversupply.
‘CAP believes that – general election jitters aside – the current balance will continue in the coming weeks.
‘The ending of official scrappage may well bring renewed focus by customers on used cars. Such an increase could be significant in its impact on late stock in particular.
‘Because the exchange rate still does not favour the pursuit of volume for its own sake, there is still a good balance of supply and demand. Along with the ongoing step back from short-cycle business this suggests that the balance could swing toward a significant shortage of late stock. In turn this could push prices up.’
A note of caution is sounded for 4x4s, which CAP believes are ‘overheated’ after consistently rising in value ahead of the rest of the market.
According to Black Book: ‘Remarkably a three-year-old example of the typical large off-roader now costs as much as a two-year-old model at this point a year ago. Only coupe/cabriolets are beating them in terms of value rises in the current market.’