Snow joke: 4×4 used values disappoint due to mild winter

SsangYong_RextonWe’re unlikely to forget the winter of 2013/2014. The country took a battering from storm force winds and rain which resulted in even the ducks running for cover.

But it was also a winter of discontent for anyone looking to sell a 4×4, with the mild temperatures meaning the expected winter uplift in residual values never materialised. According to industry experts, CAP, this left SUV values in a “lower-than-expected” position in April, not helped by the depressed winter months.

Typically, demand for 4x4s increases during the colder months, which in turn causes a seasonal uplift in prices. SUVs tend to buck the trend shown by the rest of the market, with shallower depreciation during the winter, followed by greater falls during the spring and summer.

But with little in the way of snow and ice, plus an absence of the media hype that normally accompanies a light dusting, values of 4x4s were left depressed. CAP’s Dylan Setterfield said:

“There has been much comment in recent weeks around reductions in used values for SUVs and the fact that they were falling faster than other types of vehicles.

“Some of this was due to the natural tendency among those involved in buying and selling vehicles to focus on recent history – how good is this week or month compared to the previous one?

“When values started to fall this year after Easter it sparked speculation that the SUV market was a bubble which was starting to burst, when in fact the reductions observed during April were in line with expectations.”

CAP is cautiously optimistic about the long term prospects of the SUV sector, but warns that some models, especially those which have experienced large volume increases, could be in for a “much harder landing”.

Setterfield forecasts that the lease sector could have an impact on values, arguing that:

“We expect supply, in some cases, to increase considerably over the next forecast period as previously strong leasing registrations return to the used market. As a result, used values for certain sub-sectors are set to decrease considerably over the next few years.”

For anyone buying or selling an SUV, the message is simple. A 4×4 is for life, not just for Christmas.

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