Posts Tagged ‘residual values’

A very murky crystal ball

A Very Murky Crystal Ball

January is generally a time to take stock and review the year ahead; to try and foresee what factors may affect our businesses, either positively, or negatively. We assess risk, i.e. what is the probability of an event occurring and what is the consequence if it does.

As Residual Value (RV) forecasters we go through the same process but our horizon is further out and we look at the factors influencing both sides of the market equation, supply and demand.

­ Will last year’s sales boom continue?
­ Will impending deflation/stagflation in Europe tempt OEMs to push even more cars into the UK?
­ Will the economic climate prevent OEMs from increasing prices or, at least, reduce their size?

Where do all the used cars go?

Where do all the used cars go?

788,424 new cars have been registered in the European Union within the first 6 months of 2014. This is the lowest number since the European Automobile Manufacturers Association started keeping track of this statistic. Nevertheless, the sheer number is still impressive. The question I ask myself, though, is what happens to all the used cars, because they aren’t all sold in their home countries?

We can understand why people buy new cars; they are not only more luxurious and safer but, also, more environmentally friendly. About the last point, however, you can have a long discussion. Is buying a new car actually beneficial for the environment? On one hand the average fuel consumption improves, while on the other the energy and resource-intensive production process has to be taken into consideration as well. The cars that disappear from our streets either go for scrap, or they are exported to another country. Exact figures, though, are not available. And yet those statistics are of great interest, if you think of our efforts to have a high retention of cars in the used market. The figures that are available show that, within the European Union, Germany is by far the biggest exporter of used cars. Where these used cars will be exported to is a matter of price.

What’s in a price

When you talk about a used car price, which value do you mean? The price you hope you will get from a private sale? An online quote? Here we explain the differences Read the rest of this entry »