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.”