Motoring: Brakes put on borrowing for high-mileage cars; PRICES: Finance houses change attitude as second-hand market suffers from oversupply.
FINANCE companies are putting the brakes on borrowing to buy highmileage cars.
Well-travelled models are building up in the used car marketplace, adding to fears of a damaging downturn in fortune for the industry.
While close observers of the market have long been aware of the increasing importance of mileage to the saleability of used cars, some finance providers are now said to be shying away from writing business against anything over 80,000 miles.
The warning comes from CAP Black Book, the industry's indepen-dent source for used car trade values. Writing in the latest edition, senior editor Tony Styles said, ``Mileage is always a huge concern whenever the market suffers from oversupply, coupled with a retail slowdown.
``But there is increasing talk around the trade about the new attitude of finance houses to the issue.
``First of all, they are taking a new interest in mileage and reports are filtering through that some are now refusing to underwrite new business if the mileage is deemed to be too high.
``This is again reducing demand for high-mileage cars which are now building up around the market.
``Added to this is the problem of vendors, such as fleet and contract hire disposers, insisting on achievingCAP Clean prices for cars which are closer to CAP Average condition.
``Of course, many of the people involved feel they have little choice but to aim for CAP Clean because that is the benchmark against which they achieve personal financial bonuses.
``But the fact remains that tatty high mileage cars will never achieve CAP Clean, especially in a market which is already suffering from oversupply.
``But the fact is that every car must be appraised correctly before a sensible estimated value can be arrived at and that means tying these values to the correct CAP category.''
NEW cars are now nearly 13pc cheaper on average than they were three years ago.
Some vehicles have dipped 21.5pc in price since the Alliance & Leicester car price index started in June 1999.
Three years ago, an average new car cost pounds 11,971 but by June 2002 this figure had fallen to pounds 10,445.
According to the index, all categories of car have fallen in price in the last three years.
OPTIMISM reigns in the grey import market as dealers who pulled out in the face of new regulations return to the fold.
The trend - which flies in the face of the mainstream car market's current gloom - is noted in CAP Grey Book, the only industry guide to used grey import values.
Grey Book editor Robert Hester said in the latest edition, ``There is now a notable increase in the number of people starting to deal in im-
ports - particularly in the north west of the country. This renewed interest in the Grey Import market can only be good news.
``The upshot of this should be continued growth, with a wider choice of cars available - and hopefully all prepared to the best standards.
``That way, increasing numbers of car buyers looking for something different or special will be drawn to this sector and the grey market will fuel its own further growth.''
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|Publication:||Western Mail (Cardiff, Wales)|
|Date:||Aug 3, 2002|
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