Value of ex-fleet cars continues to rise

Fleet industry data from Manheim’s monthly Market Analysis shows that prices paid for ex-company cars sold at auction continued to rise in September.

The average selling price of a defleeted vehicle was £6,706 in the month; the highest figure achieved since June 2012. Such strong values at auction have continued despite the average age of cars continuing to top the 50 month mark and mileages remaining above the 61,000 level.

Jumping by £202 when compared to August’s average price of £6,504, the current value of ex-fleet cars demonstrates the chronic shortage of good quality vehicles at auction.

This trend is further supported by Manheim data that confirms strong values at auction. When compared to the original new price of vehicles, September saw the average ex-fleet car achieve a 35% rate. In September 2011, this rate was just 32%.

Mike Pilkington, head of strategy at Manheim Remarketing, commented: "Our latest data clearly shows that residual values for ex fleet vehicles have remained strong over the last few months.

"Our report also shows that cars are moving quickly through the remarketing process; the average number of days in stock has fallen to 15 days for the last two months, compared to an annual average of 18.75.

"The big question facing fleet managers is; when will the bubble burst? Certainly, the current state of the market, where supply cannot keep up with demand, is not sustainable.

"We expect to see the market return to ‘normal’ market conditions by the new year. Clearly fleet managers should not be basing long-term RV predictions on the current performance of the market."

Looking at the price performance of specific vehicle segments, compared to their original new price highlights some interesting trends, according to the Manheim Market Analysis.

While superminis continue to hold their value well, achieving a remarkable 49% of the original price in September (up from 43% in September 2011), executive, compact executive and coupes have also shown a good return on the original retail price.

Based on the same year-on-year comparison, MPVs and 4x4s are the only segments to show a fall on this measure of 2% and 3% respectively.

Pilkington added: "Our rolling measure of ‘percentage of original new price’ provides a solid benchmark for fleet managers on specific segment performance. Looking over the longer term, this clearly highlights the winners and losers in terms of price performance at auction and should help inform fleets on their future choice of vehicle."