Fewer vehicles entering the used car market could help halt declining residual values from as early as next year.
That’s the prediction to EurotaxGlass’s as figures released by the Society of Motor Manufacturers and Traders confirm the extent of the decline in new car registrations for fleets in the past 12 months compared to 2007.
The improvement on residual values will be as a result of a continued low level of new car sales, which is producing a lower number of part-exchanges, and the supply of nearly-new cars being more than 40% lower than 12 months ago.
“During the late spring of 2008 used car demand was starting to decline and yet new car registrations simultaneously hit a three-year high, buoyed by sales to fleets that had not yet suffered the ill effects of the downturn,” said Adrian Rushmore, managing editor at EurotaxGlass’s.
With new and used car markets running at different speeds, prices fell faster than at any time in living memory. But this was unlikely to be repeated in 2009.
According to the SMMT figures, the number of new fleet vehicles fell by 7% to just over 1.1 million, with new car registrations for business fleets of 25 vehicles or less registering a fall of more than 20%.
The decline is reflected in an overall fall of more than 270,000 vehicles.
With fleets accounting for 44% of total new car sales, there will be fewer vehicles entering the used market when a typical lease finishes in three years’ time.
“With increased demand as the economy recovers, the used car market is likely to face some significant stock shortages,” said Rob Barr from Manheim.
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