In his review of the year, Rupert Pontin, chief caar editor, said that market conditions in 2013 have seen a welcome improvement over the course of the year from a Retail and therefore Trade perspective.

He said: ‘Confidence in the economy has grown consistently and, as a direct result, new and used car demand has improved significantly. The UK new car market has been the shining star in a European galaxy of doom, although the plethora of fantastic PCP, Contract Hire and Lease deals may have sown a problem for the future, if the rates have been based on unrealistically high residual values. Furthermore, some manufacturers are pushing new cars that arguably have limited current used market demand, which will pose them with an interesting dilemma at the contract end period. Trade supply of used cars is still suffering from the low registration levels experienced early on in the recession.’

He also added that market values have grown stronger through the course of the year, commenting: ‘This has been a direct result of the increase in Retail demand and reduced Trade supply from the leasing and contract hire companies who suffered restricted business activity during 2009/2010/2011. What was registered during this period was bland and repetitive product that was required for specific business use and lacked the breadth of model range choice. Consequently, top end models with high spec were absent at registration then, and are therefore absent as used examples now. Naturally this has resulted in high returns for those “different” cars, or those with a lower and more appealing mileage, as dealers fight to be able to offer their customers something more interesting. Only late-plate values have been a concern as a direct result of new car promotional activity.’

Auction activity has been another key top for 2013, with Pontin saying that this ‘has been good all year with predictable lulls in buyer demand causing less of an issue than expected. There have been plenty of opportunities for the Auction Houses to increase revenue in the form of Smart Repair activity which has been necessary to bolster the lack of revenue from industry-wide reduced volume in this age segment. This activity, whished the Contract Hire and Leasing companies who have, in some cases, taken to not repairing vehicles properly even though they charge the customer for doing so at the end of the lease. However, the disturbing habit of basing remarketing policy and personal remuneration of key remarketing employees on just one valuation point has been proven to not only distort the market place but also to cost money for the vendor in a variety of ways, including multiple auction entry and monthly depreciation.’

He also commented on contract hire, leasing and rental sector, which has seen a productive year with the overall shortage of stock causing financial returns set on pre-recession residual expectations to be pleasing all round.

He added: ‘Strategy has seen a number of changes to normal remarketing activity all focused on making the most of a situation, that will surely end in the next 12 to 18 months as defleet volume increases. The concern in this sector of the market is that forecast residuals are actually realistic. It is vital to remember that the current used car market is not the normal market and basing residuals on today’s performance would be a poor and highly risky policy decision. The analysts and RV setters at the coal face understand this but it becomes harder to impart this knowledge on the Top Table, when the Directors and Execs believe they can see continued financial wins.’

Commenting on other key topics, he said: ‘The closure of DVLA offices nationwide has posed not only redundancy but a marked reduction in the efficiency of the production of V5 and other registration documentation slowing the market considerably. Northern Irish registered vehicles have been particularly badly affected and this has affected the ability to do business in this market due to registration delays. Efficiency of plate transfer has also been badly affected. Values for these vehicles have naturally suffered as a result.’