Values of younger used cars ‘likely to level out’

Automotive intelligence expert EurotaxGlass’s has predicted that the value of younger used cars is likely to level out due to the supply of nearly-new cars falling.

Supply of nearly-new used vehicles far exceeded demand this time last year, when the volume being offered for sale was 35 per cent higher.

One factor behind the fall in supply levels is the fact that rental companies are starting to retain cars for longer periods of time before selling them. As a result the amount of ex-rental stock arriving on dealer forecourts has diminished considerably.

According to Adrian Rushmore, managing editor at EurotaxGlass’s, ex-rental cars now have "around 20,000 miles on the clock, rather than the more typical 14,000".

Mr Rushmore added that during the festive period in 2007, the supply of ‘57’-plated cars "significantly outweighed market demand” whereas a year on the level of ‘58’-plated vehicles is "far more manageable".

With a marked decline in the number of ex-demonstrator vehicles to dispose of, values of these relatively young cars may put an end to months of severe falls.

Mr Rushmore said: "They are still likely to continue to decline, as with values of most second-hand vehicles, just at a more gradual rate.

"Whether this suits potential car buyers remains to be seen."

The used car industry will hope to take advantage of faster-depreciating new cars, and the lower Vehicle Excise Duty that used cars attract, as 2008 becomes 2009.

Written by James Christie

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