Falling used car values should prompt procurement review, says Fleet Operations
05 May 2016
Author: Daniel Puddicombe
Businesses are being advised to review their fleet procurement plans in the wake of falling second-hand car values.
According to the Office of National Statistics, used car values fell by 5.6% year-on-year in February.
Consultancy firm Fleet Operations claimed this downturn should represent a "red flag" for businesses operating vehicles, as companies may be hit with loses with when they come to replace cars bought outright.
Fleet Operations added the downturn in used car values could result in the cost of new contract hire agreements increasing as leasing providers adjust their prices to take into account the fluctuating used car prices.
"Leasing providers do take residual value forecasts into account when determining the cost of agreements but this can only go so far in the face of a continued decline of used-car values," said Ross Jackson, CEO of Fleet Operations. "Different leasing providers will apply different values to the same vehicle. In some cases we have seen discrepancies of up to £2,000."