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New car VED changes could boost used model residual values, says Glass’s

New car VED changes could boost used model residual values, says Glass’s

Forthcoming changes to Vehicle Excise Duty impacting on new cars registered from 1 April could trigger increases in used vehicle values as consumers baulk at the new tax rates, according to Glass’s.

As the volume of used cars entering the second hand market continues to increase, the automotive industry data providers expect that demand will “broadly soak up the additional supply” and residual values will be resilient as a result.  

Glass’s quotes one manufacturer source as saying: “Personal contract purchases were expected to have a destabilising effect on the used car market but this has not happened.”  

Additionally, the impact of last year’s European Union referendum result was also expected to have an effect alongside the Vehicle Excise Duty measures.  

However, the source said that it was now expected to take “something seismic” for values to plummet during 2017/18.   

Nevertheless, Glass’s concluded: “But with all the uncertainty on the political and economic horizon, any impact on consumer confidence will put pressure on values and ultimately deters used car buyers as well as new.”