CAP responds to “Black Book obsession” claim
Auction4Cars.com, which sells around 400 cars a week, claims CAP’s readjustment in June was not big enough, and it should have dropped prices by 10%, rather than around 4%.
Neil Prescott, group disposal manager at Motorpoint, added: ‘Whilst there will always be an element of lag with CAP, prices are still as much as 10% adrift, and we believe this really needs to be addressed at the earliest opportunity.
‘This isn’t in anyway a criticism of CAP; more a frustration with the obsession with the “Black Book” and the effect this is having on the marketplace.’
Mike Hind, CAP’s communications manager, agreed that Auction4Cars had some points, but defended the firm’s approach.
He said: ‘Mr Prescott does make valid comments insofar as the market tends to focus only on the “CAP Clean” value, even in relation to cars that do not meet the CAP Clean criteria. There is a major issue in the current market around condition, with a mass of evidence indicating that a large proportion of the cars available do not meet that criteria at present.
‘There has also been a shift among buyers who until relatively recently were prepared to pay clean prices for cars which in truth needed investment in reconditioning, thanks to the shortage of supply. Now they are more rigorously taking into account such costs because supply is more plentiful.
‘Therefore, by definition, average market values are inevitably failing to reach CAP Clean. As Mr Prescott also acknowledges, there does tend to be an element of “lag” in a monthly guide when the market is moving quickly, so that the book can be overtaken by events. Indeed our analysis of the first week in June indicates that prices have continued to fall rapidly since publication of the latest edition of Black Book.
‘However, it should be understood that if Black Book was to publish even lower anticipated values, based on expectations rather than current information, then CAP would be rightly held to account for damaging confidence or leading the market.
‘CAP is always adjusting values based on hard evidence from the market along with expert feedback from many operators. Indeed, we are having useful discussions with Auction4Cars also, whose feedback is proving invaluable during a time of severe market instability.’
For more of the latest industry news, click here.