25 October 2006
The prestige end of the large family sector is desirable – but don’t sit back expecting the badge to sell itself
Buyers are turning their noses up at basic-spec models in the junior executive sector.
Despite large volumes of junior executives entering the market, particularly the Audi A4 and BMW 3-series, demand from buyers remains strong, with vehicles selling at an average age of 42 months of age and retaining on average 40% of their list price.
This means customers are paying just under £9000 on average for a vehicle with 62,500 miles on the clock.
Diesel vehicles slightly outperform their petrol counterparts, retaining 42% of their list price compared to 38%.
"Across the board, diesel powered examples in this sector are far and away the most desirable and getting more so," says Graham Smith of vehicle remarketing company BCA.
High-spec vehicles perform best at auction time; buyers generally avoid the basic models in this sector.
"If condition is taken for granted, the next most important criteria in the junior executive sector is specification. Used buyers generally expect an increasingly higher level of specification and nowhere more than on a car with a prestige badge," says Smith.
"Low-spec examples - typically where an employee has squeezed every last penny out of their car allowance just to get that badge on the nose - need to be sensibly valued, because they will be competing with cars with every bell and whistle imaginable. To put that in perspective, look at your base-spec car and then consider how it will compare with the same model with satnav, alloys, leather and MP3 player."
Also look for models with additional equipment packs such as the M-Tech pack available from BMW and S-Line from Audi - the right spec can make up to £500 difference in price in the auction halls.
Money spent on repairing minor dents and scrapes and those all important alloy wheel scuffs will generate better used prices in this sector. As Smith says: "If you expect buyers to pay premium values for your Junior Executive cars, invest in a good level of pre-sale preparation.
"Also consider the value of Smart repair techniques for any minor cosmetic damage such as stone chips or bumper scuffs. While it is the subtle mix of brand and desirability in this sector that combines to deliver the best residuals for the company operator, you ignore the basics of condition and presentation at your peril."
Colour is also important. Flat dull shades should be avoided in favour of sober metallics - silver, blues and greens are popular - but nothing too bright or jazzy that might date quickly. Also beware dark heavy colours that can look funereal on the larger estates.
As for the cars themselves, the BMW 3-series remains highly sought after, but remember buyers don't like base-spec models. And as already stated, there are big volumes in the marketplace, so don't expect the badge to sell itself. The touring estates are well liked and buyers will bid strongly for these.
Meanwhile, the Audi A4 is aspirational and has a timeless quality in its design. Beware of drab colours which age badly, excessively high mileage and poor condition. Convertibles are hugely sought after.
The Mercedes C-Class has plenty to attract the used car buyer just in the brand alone, but looks a lot less appealing in base spec and dull colours. Avoid the fabled 'Taxi spec' (cream paint, cloth trim, no toys). Cavernous estates are very desirable.
The Lexus IS has quickly established itself as a strong contender in this sector and delivers a well-specced package with broad appeal. There's less of the snob value in the badge, however, so this must be taken into consideration.