Remarketing
Those with diesel cars on their books are keeping one eye on the longer- term performance with the expectation that they may eventually become less valuable. That is unlikely to happen soon due to the chronic lack of all-round supply which is not likely to change for at least a year, but Business Car has previously heard from specialists who believe that the second half of the decade could be when non-plug-in used cars, diesel in particular, start to tail off. “If you look at the SMMT registrations from last year, hybrid and plug-in exceeded diesel,” says Titchmarsh, “for me – and, I’m sure, for other people in a similar position – it’s looking to see when diesel starts to fall off. There’s almost a sort of limited shelf life on those vehicles, more so than there is with others, so when is that going to start?” He adds that petrol used cars went through a strong spell when new diesel registrations started taking a dive, and points out how hard it is for the leasing industry to set residual values when trends and appetites have fluctuated as they have.
“About three years ago used petrols suddenly started to lift up, and they went above diesel in some instances,
“The broader current issue is availability of used and, indeed, new
cars; and that is creating its own set of warped results which can counteract the expected norm of any powertrain.”
especially if the car was smaller. “It’s one of those things where you set your volume and residual value on something that happened a while ago, but it’s going to do what it’s going to do. Obviously, you do your best to make sure that, when you remarket the car, you get as much for it as you can. But when it comes back, you’re locked into the value you set.”
Toyota Prius-style, non-plug-in hybrids went through the mill in the earlier days of the pandemic. They were previously one of the gems of the used car market, coveted by the private hire sector for their reliability and low inner- city running costs, but folk stopped taking taxis and Ubers in pre-vaccine Covid-19 times which hit hybrid car values hard.
Prices have since recovered according to King, but the pre-pandemic premium has not. “I think the premiums have come back over the last couple of years,” he says, “the premiums we could see in equivalent models were, at one point, 15%, but we’re kind of looking at them as the same sort of money as an equivalent output petrol engine now. They’re probably fine, but I do think it is the one technology that might be
leapfrogged by the others.”
The broader current issue is availability of used and, indeed, new cars; and that is creating its own set of warped results which can counteract the expected norm of any powertrain. “It’s across the range – diesel, petrol, BEV – you name it,” explains Shoreham’s Wright. “Don’t get me wrong, we’ve had some absolutely storming results on electric vehicles – we’ve made over list price on six-month-old Teslas – but suddenly, we find a dealer saying, ‘no I’m not buying this time, I’ve got a supply of new coming in,’ so that will drop a few thousand pounds, and this will happen within a matter of weeks.”
Demand for the Ford Fiesta – which lost its title as the UK’s bestselling car last year when sales plummeted – is another good yardstick. “The dealers are going nuts if there’s a late, low-mileage Fiesta out there,” adds Wright, “it’ll be gone immediately, and it doesn’t matter what powerplant it’s got in it. “We’ve also got a Ford dealer in London, who doesn’t normally touch diesels, because the London market doesn’t like them, but we’re adrift of that now. Even he will consider the odd diesel, because he can’t get the stock.”
Untitled-1 1
www.businesscar.co.uk | March 2022 | 29
09/03/2022 09:15
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53
