VRA issues warning on used values

Monday, 18 March 2013

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The Vehicle Remarketing Association (VRA) has warned that aggressive new vehicle discounting is set to impact on used car values later this year.

While it concedes that self-registrations helped dealers source late plate stock in the short term, it said this does have implications for the market.

“The pressure on late vehicle used values from aggressive new vehicle discounting will almost inevitably become an issue for the market this year.

“This pressure will likely highlight the value anomaly between cheaper younger vehicles and those currently very expensive three to four year old vehicles, resulting in downward price pressure on the older models,” it said.

The VRA said because of the overall shortage of good stock, dealers continue to stock older cars with higher mileage.

They have also reduced stock and increased stock turnover as the internet powered a leaner used car sales model.

“As the shortage of stock continues, dealers are changing their retail mix to suit availability, by stocking older and higher mileage models.

“They are also running with lower stocks, by as much as up to 15%, but looking to increase their stock turn in order to keep sales levels up.

“In a way, this creates a leaner, more efficient market model and of course this is reflected in prices staying firm and well specified vehicles in the right colour with sensible mileage selling for well above book values,” it said.

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