Shortage of used car stock predicted for new year

Glass's expects frenzied trade activity for used stock in January as leasing defleet activity slows at the end of the year.

According to Rupert Pontin, chief car editor at Glass's, following a period of reduced trade buying activity in the last two weeks of December the wholesale arena will start to pick up very quickly.

"New Year marketing initiatives will have brought retail buyers back to the market in significant numbers," he said, "Necessitating the need to find used car stock very quickly.

"This will pose a problem as the leasing and contract hire defleet operations will have slowed down significantly during December to ensure that over-supply to the trade did not become an issue.

"Equally, new car handovers will have been at a reduced level, partly due to the time of year and also due to the impending change of model year resulting in a drop in product flow.

"The net result will be that in the early days of 2014, trade buyers will be scrabbling to buy whatever is available and conversion rates at auctions will be very high for the first few weeks at least. Choice of product will also be limited and just about everything will sell well regardless of condition and irrespective of the wholesale route to market."

He added that the first two weeks of January are likely to see a "frenzied" rush of trade buying activity, and New Year marketing incentives will be attracting buyers to the showrooms and and retail used car sales figures will be running high.

"This means it is likely there will be a shortage of used car stock until at least the third week of the month. By this point used car defleet activity from the leasing companies will have sped up after stagnating during the last two weeks of the year and part exchanges will be hitting the trade and auction halls.

"As a direct result values in this release of the Car Data will remain fairly level with some upwards moves for key market favourites models of up to 3%. There are also some downwards movements reflecting certain areas of oversupply relative to market demand."