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Sharp falls in used car values of 6 per cent over the past eight weeks are making for a nervous used car market, according to the Vehicle Remarketing Association (VRA).
Demand for high mileage cars has fallen while that for fuel efficient cars has grown.
“Dealer members are saying there has almost been a total switch off in demand for cars coming back from lease extensions in excess of 100,000 miles, unless they deemed as good value.
“Whilst gas guzzlers are certainly feeling the pinch, small, fuel-efficient cars at the other end of the market are in strong demand, reflecting the consumers’ reaction to the UK’s austerity measures,” it said.
Dealers are stocking a greater proportion of older, lower value part-exchanges for retail sale, particularly if the mileages are relatively low.
“These would traditionally have been disposed of straight away. VRA believes this trend will continue for some time, as the effects of the weaker new car market translate into fewer good quality used cars being available,” it said.
Other VRA highlights:
- Nearly new stock is likely to continue to be in short supply
- Values of large 4x4s are under big pressure because of their high running costs
- The used van market continues to hold up well, with strong prices in most main categories.
A number of larger fleets are replacing their ageing stock, releasing used stock into the market