9:05 am, November 16, 2018
NEW CAR stock shortages caused by WLTP will continue well into 2019, prompting more retail buyers to switch into the nearly new market.
That’s the prediction from flexible lender Startline Motor Finance, which says it has seen rising demand for finance for cars under three years old in recent months and the trend looks set to continue at least into the early part of next year.
Chief executive Paul Burgess, pictured, said: ‘The September new car figures showed starkly just how much WLTP is hitting the new car market. The models that people want are just not available in many cases and the delivery times being quoted often run into 2019.
‘While company car buyers will tend to want to hang on for the right model for reasons of tax, retail new car buyers are much more likely to switch into used alternatives and we are seeing lots of evidence of this, as are other motor finance providers.’
He said the trend was causing an uplift in the value of cars under three years old, even in relation to the current, extremely buoyant general used sector.
‘In the last few years, new car deal incentives have been so strong that the nearly new sector has been relatively soft. However, that is now changing quite quickly, especially for certain in-demand models.
‘We are definitely seeing an increase in both the prices and volumes of vehicles in the sector that we are being asked to finance, and expect to see this continue into next year, purely because the WLTP situation will not resolve quickly.
‘Some dealers, especially franchise holders, are responding to this situation by increasing the amount of nearly new stock that they are holding and becoming, at least temporarily, specialists in this part of the market.’
He added that it was also possible that by the time the WLTP situation started to resolve itself next year, there would be some very strong economic headwinds caused by Brexit, which again could help to sustain interest in relatively young, used cars.
‘This is a part of the market that could remain buoyant through 2019 and one in which we expect to see ongoing, strong demand.’
MORE: WLTP explained – what is it and what does it mean for you?
MORE: Another decline in the new car market during October, reports SMMT
