UK commercial vehicle (CV) lessors viewed with alarm forecasts
in June that the value of used cars could fall by as much as 25 per
cent during 2008.
The predicted fall compares with a usual decline in values of
around 8 per cent – and caused much speculation as to how CV
residual values will fare as ex-fleet vehicles re-enter the
marketplace.
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The principal causes are the proposed increase in vehicle excise
duty and the impact of the global rise in commodity prices
including fuel.
John Watts, operational development manager at CAP, a residual
value specialist, said the used CV market was becoming “extremely
tough”. “Values,” he said, “are down between six and seven per cent
from January 1 2008, most dealers have a lot of used stock, and
turnaround is slow.”
He said the CV market – which is traditionally buoyed up by
local traders – is being seriously affected by commodity inflation
and is causing buyers to at best postpone their change of vehicle
and, at worst, go out of business.
George Alexander, chief commercial vehicle editor at
EurotaxGlass’s, added that the customary summer slump in CV sales
will exacerbate the situation. “Over the last two or three years,”
he said, “with demand reflecting the boom in the economy, values
have stayed high. The long lead times from manufacturers have added
to the tendency for values to remain high. This is all now coming
to a halt.”
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By GlobalDataDuncan Ward, BCA’s UK business development manager, said that
there is additional pressure in the nearly-new sector, where the
average values of CVs fell by around £700 in April compared with
the previous month, and in partexchange stock where values fell by
over £80 month-on-month.
A survey recently carried out by fleet consultancy Colin Tourick
& Associates Ltd found that 96 per cent of fleet operators in
the UK believe the credit crunch is having a significant impact on
the contract hire industry.
