The used car market in the UK remains ‘robust’ with no sign of any shocks on the horizon. That’s the view of a leading motor expert who believes that the UK used car market is set for a ‘soft landing’ at the end of 2013.
Used car leasing remains a great choice for many drivers, offering low payments and the ability to drive an approved used car. Here, we look at the current state of the UK used car market and outline the main benefits of used car lease agreements.
Used car market in the UK remains ‘robust’
New research from CAP Automotive is predicting that the used car market in the UK is set for a ‘soft landing’ in winter, repeating the pattern seen in 2012. With an increased supply of four/five year old cars, dealers are struggling to maintain good quality stock and this is keeping values at a high level, according to CAP experts.
The research found that values of older, lower quality cars are not sliding steeply, thanks to on-going demand from drivers. CAP say that this has left dealers with ‘little choice other than to keep stocking forecourts.’
Motoring expert Derren Martin said: “Because retail demand remains good for the time of year, dealers are therefore reluctantly buying these [older] cars and absorbing the cost of reconditioning them. Retailers still need to fill their forecourts, so buying those older cars has become a reluctant necessity.
“We are also seeing early signs of dealers across all segments building stock levels for January. Demand is traditionally high amongst consumers post-Christmas and some switched on sellers will be starting their January sale from Boxing Day. With a soft landing predicted for quarter 4, this also makes any dramatic increases in values less likely as we enter the New Year. In short, the market remains fairly robust and we foresee no unpleasant shocks in the short to medium term.”
If you’re considering driving a used vehicle, car leasing can be a great way to finance your purchase. Next, we look at the benefits of used car leasing in the UK.
The pros and cons of used car leasing
Used-car leasing offers many of the main benefits of a car lease. First, you can often benefit from low payments as your monthly cost covers the depreciation of the vehicle (and the lease fee) rather than the total cost of the vehicle.
In addition, car leasing can be a hassle-free option as you simply return the car to the lease company at the end of the agreement. You don’t have to worry about selling the vehicle yourself.
However, you should bear in mind that older cars can be less reliable than new models. Consumer Reports’ reliability data suggest that on average, a three-year-old car has more than twice as many problems as a one-year-old car does. And, if your car is outside its manufacturer’s warranty, you will be liable for the cost of any repairs.
Another risk with used car leasing is that it’s difficult to predict what that car will be worth at the end of your car lease agreement. This makes it difficult to accurately calculate your monthly costs.
If the dealer sets the residual value at the end of the term too low, your payments will be higher than they need to be. If he or she sets it too high, it gives them scope to push up the car’s initial price while offering what seem to be acceptable monthly payments.
As with new car leasing, it can pay to lease a car that holds its value well. This often means that leasing a luxury car, SUV or sports car can end up representing good value.
The used car market in the UK remains ‘robust’ with no sign of any shocks on the horizon. That’s the view of a leading motor expert who believes that the UK used car market is set for a ‘soft landing’ at the end of 2013.
Used car leasing remains a great choice for many drivers, offering low payments and the ability to drive an approved used car. Here, we look at the current state of the UK used car market and outline the main benefits of used car lease agreements.
Used car market in the UK remains ‘robust’
New research from CAP Automotive is predicting that the used car market in the UK is set for a ‘soft landing’ in winter, repeating the pattern seen in 2012. With an increased supply of four/five year old cars, dealers are struggling to maintain good quality stock and this is keeping values at a high level, according to CAP experts.
The research found that values of older, lower quality cars are not sliding steeply, thanks to on-going demand from drivers. CAP say that this has left dealers with ‘little choice other than to keep stocking forecourts.’
Motoring expert Derren Martin said: “Because retail demand remains good for the time of year, dealers are therefore reluctantly buying these [older] cars and absorbing the cost of reconditioning them. Retailers still need to fill their forecourts, so buying those older cars has become a reluctant necessity.
“We are also seeing early signs of dealers across all segments building stock levels for January. Demand is traditionally high amongst consumers post-Christmas and some switched on sellers will be starting their January sale from Boxing Day. With a soft landing predicted for quarter 4, this also makes any dramatic increases in values less likely as we enter the New Year. In short, the market remains fairly robust and we foresee no unpleashor”>David Petherick is Head of Marketing at First Vehicle Leasing, the top provider of car leasing deals and solutions throughout the United Kingdom.
David Petherick
Works at First Vehicle Leasing
Attended George Heriot’s School
Lives in Edinburgh, UK