WLTP disruption could boost used values
Used fleet values could see an uplift in an already stable market as a result of the 1 September switch to the new Worldwide harmonized Light Vehicles Test Procedure (WLTP) cycle.
Research carried out by automotive data firm Cazana for August shows that values for ex-fleet cars on a 36,000-miles / 60-months profile remained on a level with the same month last year, standing at around 53% of cost new.
Director of valutions, Rupert Pontin said that August tends to be a more stable month as defleet volumes are always quite low ahead of the September plate change – but added that the sector may see an improvement in retail pricing should defleet volumes be lower than expected in the coming months as a result of lower new car sales.
It follows rocketing new car registrations reported this week by the SMMT, which saw the fleet market increase 19.7% and the total new car market rise 23.1% in a normally quiet period, adding to ongoing debate about how the switch to WLTP may skew the usual new car market seasonal patterns in coming months, including hitting the traditionally high month of September.
Impacts upon the used car market are also expected, with experts divided over whether the bumper discounts seen for pre-WLTP cars will hit RVs or whether a fall in the number of cars being defleeted – as a result of supply issues for WLTP-tested cars or fleets hanging onto true NEDC-rated models – will counter this, as per Pontin’s comments.
Cazana’s latest figures also show that talk of falling used diesel prices may be misplaced. The research compared performance to last year on both three years / 36,000 miles and three years / 60,000 miles for both petrol and diesels. At the lower mileage the data shows there is consistency of pricing for diesel cars in comparison with August 2017 and an increase in values for petrol cars.
However, the position is reversed for higher-mileage ex-fleet stock with diesel values one percentage point higher than at the same time last year. Pontin added that this may be a blip due to lower defleet volumes in the run-up to the plate change in September. Conversely, petrol pricing remains stable where arguably there is less stock available and the market might expect higher retail pricing.
Pontin added the figures show anecdotal discussion and protestation that retail demand is lower for diesel cars with retail pricing falling is certainly not the case for three-year-old cars.