The growing trend to purchase cars using personal contracts (PCPs) in the UK is causing the values of certain high selling models to depreciate faster than normal.
Top sellers like the Ford Fiesta and Vauxhall Corsa have been bought in record numbers in recent months, but the vast majority of sales have been processed through PCP deals. Insiders are now claiming that this has saturated the used car market with thousands of nearly new cars of the same few models.
According to the Finance Leasing Association (FLA), consumer-used car purchases increased by 34% between the February 2015 and February 2016, amounting to £4.9 billion worth of sales.
But while big sales figures have given the UK motor industry a reason to celebrate, concerns for tumbling resale values mean many owners wanting to trade in their cars could be offered much less than the recommended resale value.
One spokesman told Autocar that his showroom has an unprecedented number of used Ford Fiestas for sale, with most having come to the end of their PCP terms.
“The cars are going for less than they should because of the market conditions. It’s supply and demand,” he said.
“Even the part exchange values customers are being offered aren’t worth what they expected because of the change in the market,” he added. “It means instead of upgrading their cars, they’re often forced to stick with what they’ve got.”