Is daily rental returning to normal?

  28 April 2014

I know the release date for April’s new-car registration figures are almost upon us, but this week I learnt a bit more about the March stats. Or, more precisely, the reason for the surprisingly large increase in registrations last month. It seems that while, in general, manufacturers are behaving themselves when it comes to pushing cars into short-cycle daily rental, there was a blip in March.

Coupled to the already buoyant retail market this led to the whopping 17% increase in registrations for the month.

 Given there is often an uncomfortable closeness between new and late used-car prices thanks to a shortage of nearly-new stock, and fantastic finance offers on new, an increase in the sub-one year used car market can’t be a bad thing for retailers – provided it’s flagged up in advance and stock is managed appropriately. This is particularly the case when the majority of short-cycle vehicles end up being retailed through their respective franchise networks.

 Speaking to CAP about the launch of Gold Book Short Term (see news story), it seems the overall outlook for values in the used car market is likely to be strong for some time, even if the upward trend may at least level off.

Interestingly, there is clearly a market for value predictions for cars of less than a year old from rental companies and manufacturers, otherwise CAP wouldn’t see the merit in a dedicated product for this market.

It could also mean that it’s one to keep a close eye on from a retail perspective and a possible indicator that March may not be a one-off and we’re returning to a more ‘normal’ state of affairs in terms of vehicle supply to daily rental, and then on to nearly new used car supply for retailers.

 Tristan Young

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