Used car market stabilising after April downturn, says CAP
Research for Black Book Live during May supported CAP’s view that last month’s downturn was a relatively short-term phenomenon, driven largely by increases in used car volumes.
The company says that rising new car sales have brought more part-exchange vehicles back into franchise dealers, reducing their need to actively source used car stock in the open market.
A consequence of this has been reduced demand at auction, coupled with an increase in supply as those same dealers send their unwanted older part-exchanges to the block.
This is also prompting a trend of faster depreciation for older vehicles as their numbers increase, also reported by Black Book Live.
CAP adds that it believes the overall picture is positive for the market, despite the current trend of increased value erosion.
Independent used car specialist dealers and car supermarkets in particular are already benefiting from franchise dealer used car departments switching focus onto their own influx of part-exchanges, instead of competing hard for stock and pushing values up in the auction arena.
Black Book Live’s senior editor, Derren Martin, said: ‘Over the next few weeks we expect more typically seasonal downward adjustments to values as the increase in used car volumes begins to diminish.
‘This is, in fact, a very positive time for both the new and used car markets in Britain. Our new car sales are the envy of Europe, franchise dealers are enjoying having to work less hard to get hold of good used cars and independent dealers are happy to see fewer franchise dealers competing with them at auction.’