FLEETS are being told to continue to set reserves at levels which encourage secondhand car buyers to bid for ex-company cars. The plea comes from Manheim Auctions' senior group auctioneer Andrew Shepherd, amid continuing concern that the buoyant secondhand market could wane next month before picking up again in June and July.

With buyers stocking up forecourts in the expectation of strong sales over the Easter period, Shepherd said: 'It has been good to see that many national fleet vendors have kept reserves to sensible levels and have also given the buyers the incentive to bid by putting vehicles on sale just below reserve - which normally results in residuals creeping over reserve. Vendors should keep pushing the volumes through the auction halls and give buyers the incentive to bid.'

As a result, average prices have been well above guide book figures, with Shepherd claiming that prices are about 105% of CAP 'clean' for late, low mileage stock, although there are individual figures of 120-130% of CAP 'clean' on hi-specification, well presented cars, such as Chrysler Jeeps and people carriers. With the current buoyancy lasting longer than previously thought - but a downturn being expected - Shepherd urged fleet managers: 'to read the market carefully and report and react to it.'

He added: 'Fleet managers may find it changing and they will need to change with it to retain sales volumes.' Already, changes in volumes are being noticed with the number of vehicles from fleet and leasing companies becoming tighter, with some buyers reporting stock shortages, which is contributing to strong residual values.

But, with the retail market only 'average' at the moment, although expected to surge next month, Shepherd expects a repeat of last year, which saw a decline in the buoyant secondhand market in April and May. However, he added: 'Depending on stock levels with the fleet, finance and leasing companies, I expect an upturn in the market again during June and July and August could be a difficult month to predict. I expect much of the focus during August will be centred on new registrations, and this may cause some lethargy in the used car market but only time will tell.'

CAP Network's monthly Used Car Confidence Index this week reported that used car dealers were positive about the market's prospects for 2001, with them describing current trading conditions as 'acceptable to good'. Sales of superminis and lower medium sector cars are proving most popular among used car buyers with sales of sports and executive cars continuing to disappoint.