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REMARKETING: Fleet-favourite models remain the strongest used sellers

Date: 22 November 2012

Are conventional business car choices the best or do the less obvious models fare better second-hand? Jack Carfrae explores whether fleets' favourite models from new retain their popularity on the used car market

Fleets have their favourites when it comes to new cars, but does that fondness make its way onto the used market and translate into strong demand from traders and other second-hand buyers?

Across the board the remarketing industry is reporting the same general traits as the new car market, in that the more economical the car, the better a chance it stands as a second-hand buy, regardless of its price. According to BCA's Simon Henstock: "Whether they are spending £1000 or £10,000 on a used car, there is a growing expectation from buyers that their purchase should deliver the best possible fuel economy - however that is interpreted in the real world.

"It's worth considering that this demand for more economical motoring is no short-term blip, but more indicative of a longer-term trend that is likely to affect the used car landscape going forwards. It will continue as long as fuel prices continue to be high and motorists feel under pressure from the tough economic conditions."

In terms of the specific models that are drumming up the most interest among buyers, it's once again the premium brands that are proving the most popular on today's used car market, particularly those models that bear desirable badges and are also clean and frugal, as valuation services manager Gavin Amos at CDL VIP Data explains: "Anything primarily with a strong image - BMW, Audi etc - that has a clean, low-CO2 engine is proving evermore popular."

Roddy Graham, commercial director at Leasedrive, agrees that well-specced, prestige German cars always perform well when they're defleeted, but also claims that models new to the marketplace are good sellers second-hand: "[Well-specced] BMW and Audi products perform consistently regardless of the market conditions.

"Vehicles at the early stages of their life cycles prove popular when they first hit the wholesale market - an example being the Lexus CT200 - and as volume increases prices soften. Another example of this is the Vauxhall Insignia."

Surprisingly, considering the emphasis on frugality and low emissions, large, extravagant 4x4s are the joker in the pack on the used car market and still perform well in many cases. Amos explains: "Big, high-image 4x4s such as the Range Rover, BMW X5 and Audi Q7 [are strong sellers]. These cars continue to do well as long as the colour and spec is right."

This isn't an isolated opinion either, as John Davies, chairman of the Vehicle Remarketing Association (VRA), claims there is a strong market for what he describes as "lifestyle" vehicles: "Running costs will undoubtedly continue to dominate purchasing behaviour, but this might be offset against the continued desire for certain differentiation from consumers. For example, 4x4s or variants that appeal to lifestyle choices and do not compromise the economy objective will continue to attract a strong following."

There are a few old favourites on the used market too - models that perform consistently well regardless of the market conditions and are always a sound bet for fleets when it comes to shifting them on. According to Graham, traditional upper medium and lower medium fleet favourites that represent a lot of car for the money are usually popular: "Product that is perceived as [good] value - 70,000- to 80,000-mile Mondeos and Astras perform consistently."

Amos agrees that it's the tried and tested models that are the most popular with used buyers, but points out fads that exist within the used market - vehicles that see a flare of initial interest from buyers but don't stay in favour for long: "The Golf, 3-series and Fiesta continue as the old favourites; small coupes such as the Honda CRZ are quickly going out of fashion. A lack of practicality and clean engines are a real turn-off to a potential buyer."

German brands

It seems unusual given their aforementioned popularity, but the premium German brands aren't immune from a drop in demand despite the badge on their bonnets. Correctly specced upper and lower medium models seem safe bets, but once again, throw a less practical body style into the mix - in this case another coupe - and interest is liable to wane, as Graham explains: "The [Audi] A5 was strong 12 months ago, [but] over the past few months we have seen a gradual decline in performance for average specified models."

In terms of maximising values come resale time, the advice is to stick with the likes of properly specced, low-CO2 A4s and 3-series to yield the best results. However, there are certain sectors that are showing promise. Davies claims that hybrids and eco variants have become appealing to used buyers, as are value-led Korean models courtesy of their lengthy warranties: "Hybrids in their relatively limited numbers fare very well in the market, providing mileages are sensible.

"The economy variants of the bigger models [such as Volkswagen's Bluemotion and Ford's Econetic], particularly compact executives and even some of the larger executive cars, are very strong and will continue to be so.

"Demand for some of the Korean models [Hyundai and Kia] has certainly increased as the market recognises the excellent value for money they represent coupled to the longer warranty packages."

Amos claims that smaller 4x4s are also ones to keep an eye on based on the fact that buyers are effectively downsizing from a larger 4x4 but benefiting from lower running costs at the same time: "Small SUV sales performance continues to grow. The downsizing that we have seen in recent years continues to attract a wide audience."



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