cap hpi considers market stability
Following another record month for new registrations in March, at 5.3% growth, cap hpi is warning that consumer demand is key to market stability.
The vehicle data specialists have reported a healthy used car market with demand strong at the auctions and on the forecourt, but detailed analysis by cap hpi over the next few days of the latest SMMT figures will give a firmer picture of their likely impact on the used car market.
Commenting on the market, Derren Martin, senior editor at cap hpi said, ‘March was the strongest month on record for new registrations, beating a record month in 2015, and it was particularly interesting to see the recovery in the fleet sector with demand growing by 6.0%, having struggled in January and February. How the industry copes with increasing volumes of vehicles returning to the market, particularly from ‘tactical registrations’ via pre-registrations and short-cycle daily rental channels, will underpin the stability of the used market.
‘cap hpi has reported the strength of the market through the first quarter of this year. We are seeing this bullish market reflected in new registrations, used demand and dealer sentiment. Continued strong consumer demand will be the key factor to underpin residual values over the coming months, as record volumes of vehicles return to the market.’
The company undertakes a monthly survey of dealers and reported 32% of dealers, indicated that they had seen an increase in finance penetration. Over half the respondents claimed that the current trade prices are too high. Adding to this is the pressure on margins, and signs that there is a reluctance from consumers to absorb increased forecourt prices.
Derren continued, ‘There will also be an abundance of late-plate cars appearing in the market over the next few months, indeed “16” plates were already being advertised on popular used car websites from the early days of March. Concerns around oversupply do need to be tempered with the fact that retail demand for used cars remains healthy – consumers are still actively buying, interest rates are low and the economy remains strong.’