News - Page 1705

Residual values are determined not by manufacturers, or indeed Cap Monitor, but the typical used car buyer. To understand the whys and wherefores of residuals you must get inside the head of that person.

Retail optimism remains quite high but there is still no shortage of late-plate cars around - especially Ford and Vauxhall. This means 98 and 99S plate Mondeo LX and Vectra LS are available in reasonable numbers at around £8,200 if sourced individually.

Stronger than expected new car registrations in July have lifted industry confidence for the second half of the year and yet again forced market planners to revise their total sales projections upwards.

The switch to a twin plate change seems to be paying off, despite a shaky start to the year, after June registrations leapt 15.7% on last year.

The past few weeks have failed to bring the much-needed upturn in retail interest which is necessary to steady the fall in used car values. Car prices have by no means crashed, but they have fallen for well over a year, leaving most people surprised and disheartened.

For a long time now we have seen the phenomenon of Scorpio, Omega and Renault Safrane 'executive' sector cars suffering far greater depreciation rates than smaller cars. And now we are beginning to see the ultimate proof of this with some used small cars retailing at more money.

Motor industry bosses are revising sales forecasts for the year upwards as a result of another strong month for registrations.

Back in April I predicted that year and letter values might begin to give way to model year as the determiner of values, due to the retail customer's improved product knowledge. This is happening.

The Government's fuel escalator now means that diesel is more expensive per litre than petrol and with the typical knee jerk reaction of our industry there are now widespread predictions that diesel car residuals will suffer as a consequence. This, however, is not the case.

Nothing illustrates the difference between the new and used car markets better than the perception of engine capacity by the customer. As the current Clio ad states, size certainly does matter – but the way in which it matters is different depending on the market.

Whenever a new car is launched into the UK market it is accompanied by a massive marketing campaign. Millions of pounds are spent on hyping the car with TV ad campaigns, Alpine or other exotic test drive events, and promotions in magazines and newspapers. Add to that the huge sales push from the franchise network and you have a phenomenon from which there seems to be no escape.

Every one of us in the trade has fallen foul of the wrong car from time to time - it is an occupational hazard. But what is the 'wrong' car? Well, the answer to that can vary according to circumstances, but at the moment you have to be especially suspicious and cautious of big, older smokers - because everyone else is.

At last all the speculation about the T-plate and its impact on late plate values is over and instead, we are seeing the results and it has to be said 'they ain't pretty'.

March finished with registrations 73% higher than the corresponding month last year, and the industry at odds over its significance.

Never are the differences between new and used car buyers more apparent than when it comes to spec. Referring to the corporate sector, because of its dominance in the new car market, enhanced specification is often a badge of success. This is why many higher spec cars show their differences on the outside.

For the second year running, sales of the Renault Megane are growing faster than those of any other car in the UK. Analysis of detailed registration figures, published by the Society of Motor Manufacturers and Traders, shows the Megane added more than 25,000 units last year, a growth rate of 44%.

Everybody assumes that vehicle condition appraisal only applies to used cars. But I would suggest that appraisal should start even before the car is bought. We are used to having our ears bent by colleagues in the disposals world. But the situation is worse than normal.

Carmakers and dealers are braced for a dramatic market decline this month as the official January registration figures reveal the true effect of a March plate change on annual buying patterns.

Last month I promised to explode a few myths which plague the world of future residual values. And what better way to start than with the simple and dangerous way of setting residual values as percentages of list price.

The upturn in trade and retail activity has turned out to be a blip, rather than the start of a significant recovery and one of the factors causing this is the continuing realignment of new prices by manufacturers. The trade is increasingly wary of price cuts, such as the recent slashing of Citroen Saxo by up to £1,200. This is bound to impact on late-plate values and therefore 99Ss are the latest big worry.

Although the past 12 months have been quite disastrous for many used car people, a more positive mood emerged ahead of January. Used car buyers returned during December and although they were inevitably cherry-picking, they were leaving with cars.

Although demand for Mazdas and Mitsubishis is hardly on fire, medium sector Japanese imports are generally faring well in the used market.

The latest Astra is hardly a thing of beauty and dealers report private new sales can be stimulated only by substantial discounting.