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CAP confirms short-cyle residual value pressures

Date: 14 February 2014   |   Author: Martin Gurdon

CAP Black Book Live senior editor Darren Martin has echoed fears that manufacturer-driven, short-cycle daily rental sales are hurting residual values.

His comments follow those of leasing company Pendragon Contracts' divisional managing director Neal Francis. He said that a rash of short-cycle sales was damaging RVs.

"We are already seeing some pressure on values where short-cycle cars are returning to the market," warned Martin.

"The increase in rental business is not confined to the usual suspects among the mainstream volume manufacturers, with some premium German brands also posting very substantial increases in that area too," he said. 

CAP believes that there was a flood of short-cycle deals at the end of 2013 and that these, combined with "large numbers" of pre-registered cars, are putting downward pressure on wider residuals. 

Another factor CAP fears will suppress residuals is the condition of cars entering the wholesale trade market.

In its latest Black Book Live market report, CAP warned that 'only around 20% of cars available in the current trade market could be described as anywhere near clean.'