Fleets distorting used car and van markets by ‘hanging onto’ vehicles, warns Glass’s
Fleets “hanging onto” cars and vans at disposal time to achieve inflated valuations could be losing out financially as well as distorting the market, according to Glass’s.
Director of valuations Rupert Pontin says that reluctance to sell below guide prices and continually resubmitting vehicles for sale at the same or other auctions is creating a range of problems.
He explained: “Lately, we are going through a phase where we see the same cars and vans presented at auction time and again – and our feedback says that failure to reach book values is the reason.
“With some of the industry price guides consistently overvaluing the market in recent months, it appears to be becoming an increasing problem. Large numbers of vehicles are remaining unsold.
“Firstly, this means businesses are holding onto vehicles much longer than they should, so are taking longer to convert valuable assets into cash. Also, while they remain on the books, the value of these cars and vans nearly always tend to continue falling, leading to a double loss.”
He added that the trend also made it difficult for market experts such as Glass’s to work out exactly what was happening to the value of certain models.
“A particular car or van may look like it is doing quite well but then it becomes apparent that this was due to fleets holding onto stock in an attempt to reach unrealistic guide prices. Eventually, these cars have to be ‘dumped’ onto the market and you see a sudden fall in values as oversupply occurs.”