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What’s hot in the prestige car market … and what’s not – April

Prestige car market report
PORSCHE residual values are on the rise while cabriolets and roadsters are on the slide.
Special report: Richard Crosthwaite
294_PorscheBoxster
Porsche Boxster: upswing in residual values will be welcomed by Porsche owners

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25 April 2012

Porsche Boxster
Porsche Boxster: upswing in residual values will be welcomed by Porsche owners

By Richard Crosthwaite, prestige car editor, Glass’s

WE’VE got through the Easter break now and the kids have gone back to school. So what’s going to the top of the class in the prestige used car sector?

What’s hot

Porsche. The company’s sports car are showing positive value signs. Boxster, Cayman and Porsche 911 Generation 2 997 are displaying small value increases in the guide. Such news must be welcome.

Porsche has been through a tough few years, with new car sales much harder to come by than in recent times. Competition is now fierce in this sector, and this – combined with the economy and higher sector volume – has meant residual values have struggled.

For Porsche owners this has caused a problem because the “price to change” has increased which in turn has meant Porsche owners have kept their Porsches for longer. New model introductions will help matters, but significant new model 911 price increases perhaps won’t…Still in the short term values are looking firm. In many ways a second hand Porsche sports car has never looked such good value…if you want one, now might be the time to buy.

Small petrol engines. Have you seen the price disparity between petrol and diesel and the forecourts? Quite. So have used car buyers. That’s why prestige models from supermini to family hatch with engines under 1.8-litres have become very popular. No wonder, fuel economy is nearly a match for diesel equivalents, they are quieter and smoother to drive, and residual values are lower than they are for diesel models. Little wonder, then, that they are building up a following.

Jaguar XF 2012 MY. This model has now made its debut at auction and met with strong demand from the network. Prices are circa £2000+ over the same plate 2011 model year car, which for a mild facelift is an impressive feat! This can be explained by Jaguar’s lack of a wider portfolio which means the dealers are crying out for “new” and “rare” offerings for their customers, which magnifies the wider market’s desire for “new product” even further…

What’s not

Cabriolets and roadsters. These cars are neither “Hot” nor “Not” – tepid is the best description. However, now is the time that they should be really popular as we roll towards summer, yet this lack of real demand is carrying on where it left off last year.

For the third successive year, many prestige car makers have held on to stock to prevent selling these “seasonal” cars in the gloom and murk of winter, when the last thing buyers think of is driving with the roof down.

The upside of this strategy of selling them in March/April is that they achieve higher values; the downside is they flood the market which both stops the price heading higher and means most dealers have plenty of stock on their forecourts already. For the last two years this has meant values, instead of rising in April to June/July and then falling away, have risen earlier in February to April and have then fallen away. This pattern has repeated itself this year. Only a long hot summer (and the forecast for the next six weeks is far from that) can add support before the harsh autumn/winter value falls ahead.

4x4s. Heavier than market average falls this month for the SUV sector. The BMW X1 continues to fall back to “find its level” after its extended honeymoon period. The only 4x4s that buck this trend and remain in demand are the new BMW X3 and the Porsche Cayenne diesel, as both remain relatively rare.

Expensive “autopilot” options…whether they parallel park the car for you,  prevent you from thumping the  the car in front, or warn you when you wander out of the your lane on the motorway (I wish someone would invent one that kept slow drivers in the slow lane!). These are incredibly clever and also incredibly expensive options, which by and large are not worth much once the car is on the used car market. If you run your own small business and like to buy your company car and want to maintain the best residual values, or want to reduce the company car tax for your business car drivers, then the best company car advice is to avoid ticking these option boxes.

Richard Crosthwaite is prestige car editor at Glass’s Guide.

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Ralph Morton

Ralph Morton

Ralph Morton is an award-winning journalist and the founder of Business Car Manager (now renamed Business Motoring). Ralph writes extensively about the car and van leasing industry as well as wider fleet and company car issues. A former editor of What Car?, Ralph is a vastly experienced writer and editor and has been writing about the automotive sector for over 35 years.

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