Aggressive pricing puts downward pressure on prices of nearly new cars and vans

Consistent prices of around 97% of CAP Clean were being achieved during May for ex-fleet cars, while the buoyant light commercial market saw prices average 100% of CAP Clean, reports the Vehicle Remarketing Association (VRA).

A good steady balance of used stock has been consistently entered for sale which has helped fleet vendors in particular report healthy conversion rates as well as consistent prices both when selling to the trade and to retail buyers.

However, any car that hasn’t sold on its first attempt is struggling to find a new owner, reinforcing that used buyers are very focused on what they will buy and at what price.

Franchised dealers are regular buyers of three year and older cars reinforcing the increased efforts being made to widen their stock appeal during this tough economic climate.

Dealers are also tending to trade more of their part exchanges taken in against new or used stock, reducing volumes coming into the used market, but importantly helping drive dealer profitability.

There are signs that the aggressive new deals being offered by manufacturers are putting a downward pressure on prices of nearly new cars and vans, says the VRA.

If manufacturers then redirect some of their vehicle volumes from economies having a tough time in the Euro zone over to the UK in the coming months, this could provide further challenges for the sub 12 month old sector.

There are some early signs of bulk-buy deals also being available from manufacturers which could further put pressure on prices and demand for nearly new cars.

Highly competitive new car finance schemes are being underwritten by the manufacturer’s finance divisions and the number of cars coming back from lease or PCP agreements being sold directly to dealers continues to grow to meet their appetite for two, three and four year old cars.

However, the biggest immediate concern on all new and used car radars is whether the summer of football and Olympics started by the recent Jubilee celebrations will dent demand for used cars and light vans in the next few months.

It says that Euro 2012, the Olympics and Paralympics could all provide a distraction to new and used buyers, but only time will tell before we know the true impact.

The early signs are that the restrictions in and around London for the movement of goods caused by the Olympics will impact on all car/van collections and deliveries.

Currently the only alternatives will be for operators to collect or deliver cars in the middle of the night adding further challenges and costs for dealers and car delivery companies alike, including possible new vehicle delays for fleets and consumers in the run up to the September plate change.