Latest VRA report shows marked changes in used market
The report looks at a number of the factors which are driving supply and demand across the entire industry and is designed to act as a market commentary rather than a detailed report.
The latest report identifies a number of factors that have affected the shift in the market including the reduced number of days of trading in April and the two weeks of school holidays, which reduced the number of buyers in the market.
Delivery delays from Japanese brands as a result of the earthquake and tsunami have also had an effect. Some manufacturer ex-management and fleet demonstrator replacement programmes are now being frozen, which will restrict the supply of nearly new stock into the market. And long delivery lead times and reduced manufacturer production have impacted on the rental fleets, forcing them to extend their replacement cycles. Meanwhile retail demand for new cars in general dropped off in April so further restricting supply of part exchanges into the second-hand market.
In the longer term, these factors will impact on the market in 2-3 years' time. However, the VRA says that May and June are being predicted as recovery months for the used market with the last of the remaining dealer part exchanges from the new registration activity in March being cleared and the fleet and leasing stock move in larger quantities.
The VRA has also reported a change in demand for engine sizes in April and early May. This follows a pattern of increased interest by consumers in smaller, more economical diesel engines and demand is now mainly for 1.6-litre turbo diesels instead of larger 2.0 litre and above engines and all makes and models, providing they are in good condition.
This contrasts with the higher-end of the 4×4 sector where the likes of Range Rover Sports are worth £7-8,000 less than they were eight weeks previously. The report adds that smaller 4×4 SUV sector hasn't been impacted so severely with the right specced models finding new homes, albeit at slightly lower prices than two months ago.