BCA CCT Knowledge LogoWhat is the used market making of the different types of four-wheel-drive models at the moment, and what has the mild winter done to demand for all-weather models?

SUVs and crossover vehicle have been the big growth area of the car market for some time, but the majority of these have the off-road looks without the ability; they’re generally front-wheel drive rather than having all-wheel drive.

The crossover pioneer, Nissan’s Qashqai, is a fine example with just 3-5% of models fitted with four-wheel drive, according to data from Cap HPI.

Demand for four-wheel-drive versions of regular mainstream crossovers and SUVs that aren’t likely to venture too far from Tarmac doesn’t cover the up-front cost new, with that same Qashqai 4×4 likely to command a 5% used price premium over its front-drive sibling, added to which there are also increased emissions to think about. In fact, that reduced efficiency can, in some cases, even mean the four-wheel-drive examples are worth less than their used two-wheel-drive counterparts.

Secret Diary - 19th March 2018 - Suzuki Jimny - Image 5

Suzuki Jimny

The story is different for ‘proper’ 4x4s, with Cap HPI’s senior valuations editor, Mark Bulmer, pinpointing the Jeep Compass, Suzuki Jimny and Toyota Land Cruiser as models that are selling well, even though there hasn’t been a seasonal lift across the sector.

“On the whole, 4×4 models have not seen a spike in prices and this may be partly because of the mild winter,” he says. “Once again, lower-value 4×4 vehicles have held their own but have not seen values move up as much as they can when the winter is much harder.”

The National Association of Motor Auctions has found a similar trend. “There is still a small price hike in winter, mainly on working 4x4s, but generally 4×4 residual values are consistently strong,” says head of NAMA Louise Wallis.

 

PREMIUM 4×4 SALOONS AND ESTATES: CUSTOMERS WILLING TO PAY A PREMIUM

Demand for premium passenger cars with four-wheel drive is high, with Audi’s quattro models the leading exponents.

Aston Barclay managing director Martin Potter says his firm saw a premium of around £3000 for these cars over the two-wheel-drive equivalent, and cars with BMW’s xDrive system sometimes even outpointed that.

Cap HPI agrees, with senior valuations editor Mark Bulmer pointing to the brand’s “great reputation” in four-wheel drive; quattro cars make up around 20% of its sales.

Among prestige 4x4s, NAMA found that vehicles such as Range Rovers sell better in London and Manchester, although among prestige models the move to petrol is also apparent despite the higher fuel costs, especially in areas where ultra-low emission zones are on the horizon.

 

WINTER TYRES AREN’T A USED WINNER

The used market experts report that there’s no significant extra value in cars fitted with winter tyres, despite the fact that these can actually be a better bet than all-wheel drive in bad weather.

“There is no uplift for cars with winter tyres and we would always recommend that normal road tyres are fitted before the car is sold,” says NAMA chair Louise Wallis.

The only exceptions are working 4x4s where the prospective buyer will appreciate the benefit.

 

BIG NEWS FROM A BIG YEAR

Stuart Pearson, BCA’s COO UK Remarketing gives his top five tips gives his five top considerations when it comes to managing all-wheel drive models.

Stuart-Pearson - MD - BCA UK Remarketing

Stuart Pearson – MD – BCA UK Remarketing

 1. Keep a weather eye out

There is an element of seasonality attached to the sales of SUVs and off-road vehicles, which typically climb when the weather is worsening. Any hint of slightly more ‘extreme’ weather will have an almost immediate impact on 4×4 values.

 

2. Don’t neglect the usual rules

When it comes to remarketing their company vehicles, seasonality is just one of the factors that fleet managers should consider, but not at the expense of age, mileage and condition. It is worth remembering that high-demand, popular models will sell strongly relative to the market whatever the time of year.

 

3. Don’t wait for the right time

Company car managers have to sell their vehicles at de-fleet time whatever season it may be. The critical factor is to carry this out quickly and efficiently to ensure the best possible return to the company bottom line.

 

4. Don’t hunt hot spots

While there may be occasional local price hotspots for certain types of used vehicles, they are unpredictable and tend to be short-lived, which makes them largely irrelevant to corporate sellers. Any perceived value improvement would have to outweigh additional logistics fees for a start, and if there is a sudden influx of similar product, any price benefit will soon evaporate.

 

5. The web casts a wide net

Online selling platforms create a national buying base for all remarketing centres, wherever they may be located. A widespread physical footprint is important to allow vehicles to be defleeted into a nearby location, while the buyer base is effectively anywhere in the country and doesn’t necessarily need to travel to bid. While there will always be ‘regional’ customer support, the remarketing industry is international.