REMARKETING: Alternative bodystyles and rock-solid residual values
20 January 2014
Author: Jack Carfrae
Crossovers, small SUVs and other niche bodystyles are becoming ever more popular, so offer good returns. However, sellers shouldn't assume that RVs for these vehicles will always remain strong, as Jack Carfrae writes
The RV argument for models such as the Skoda Yeti suggests there's a case for procuring crossovers, so long as they fit the profile of the business
The amount of different bodystyles available on the new car market has done nothing but increase since the turn of the century. Manufacturers are desperate to carve out the next new niche and have a pioneering vehicle on their hands that's a hit with fleet and retail customers alike.
As a result, crossovers such as the Nissan Qashqai, the Skoda Yeti and the Volvo XC60 - and small SUVs along the lines of the VW Tiguan and the Ford Kuga - have come onto the market in their droves.
They've also provided a practical alternative to traditional lower and upper medium models, gaining in popularity and residual value strength as a result, and subsequently establishing themselves as strong second-hand sellers.
Simon Henstock, operations director at remarketing firm BCA, believes the used market is crying out for more examples of vehicles with alternative bodystyles.
"Crossovers and SUVs are very popular with motorists because they are both fashionable and practical, and even with growing numbers in the marketplace this sector remains relatively under-represented in the used car market.
"Professional buyers also like SUVs because they are attractive retail propositions, but are fussy over condition and mileage and expect to see a substantial service history - preferably with the supplying dealer."
The adverse effect of that popularity is that such models can be quite expensive. Henstock continues: "The critical factor is inevitably price. SUVs can look expensive when compared with the traditional alternatives - hatches, saloons and estates - which are available in large numbers at a variety of price points."
Rob Rossiter, remarketing manager at leasing company ALD Automotive, thinks that there's now a consistently strong demand from the retail sector for these vehicles, so they're likely to continue selling well: "I do think there is a core group of people who really aren't looking beyond traditional styles of vehicles, which means that the manufacturers of the Golf, Focus, Astra and Ceed aren't in any immediate danger.
"But it's clear there are people who wish to stand out in the car park, and some of the crossover-style vehicles do tick a lot of boxes for them in the way they look and the practicality of what they offer."
If the dependable popularity and the residuals of such models is to be believed, then there's arguably a case for procuring them instead of traditional lower and upper medium vehicles, providing they fit the business profile.