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A mix of over supply and longer vehicle lifespans could smash used car values and render some older models worthless, warned Manheim Auctions’ Rob Barr at the first Motor Trader Forum.
Barr: 32m vehicles have joined the market
“More used cars are being pushed at the consumer,” Barr told Forum delegates, warning that an extra 32 million secondhand vehicles had joined the market in the past six years.
“What are we going to do with these cars? Line them up bumper to bumper? That’s 1,200 miles, or three times round the M25,” he said.
Barr suggested that the trade needed to find ways of speeding up sales ‘churn’ as a means of sustaining demand but said that he feared over supply could lead to market saturation.
We are moving more cars than there are people or space for
“We are moving more cars than there are people or space for,” said Barr.He suggested that the average D sector model was worth £500 after ten years and that many with 100,000 miles plus on their milometers were still fit for purpose but could end up having no intrinsic sales value.Barr said that this trend was impacting on younger vehicle residuals.
“One year old Mondeos and Vectras are incredibly good value. Why would I want to pay £15,000 when I can buy one for £11,000?” he added.