motoring guide

2010: The year of the used car?

The scrappage scheme provided a much needed boost to the automotive industry and enticed thousands of people to buy new vehicles, with the Society of Motor Manufacturers and Traders repeatedly reporting surges in sales.

But now that it is over, are people going to stop buying new vehicles? If independent car advice website honestjohn.co.uk is to believed, the answer is no. The portal recently predicted that 2010 could be the year of the good value used car.

"In 2009, good quality used vehicles were thin on the ground as a direct consequence of the severe downturn in the new car market, fleets holding onto their stock for longer than ever and private buyers putting off changing their cars," commented Dan Harrison, editor of the website.

"The result was a clamour for the remaining stock amongst dealers and huge used car price rises. Great for sellers – but not such good news for buyers," he added.

However, towards the end of the year a better supply of vehicles started coming on to the market via dealerships and auctions as well as private sellers, so prices started to settle down.

"I believe prices will become far more realistic as 2010 progresses and supply matches demand. But the slump in new car sales to fleets over the past 18 months means that there will continue to be a shortage of cars that are six months old or less," Mr Harrison said.

Glass's Guide, often referred to as the used car dealer's "bible", has identified increasing demand for luxury vehicles. Despite the fact that petrol prices are on the rise and high powered cars are often thought of as gas guzzlers, buyers are on the lookout for prestige SUVs, 4x4s and supercars.

The value of a typical used family car has risen by at least two per cent since January, but large 4x4s have registered an increase double this amount. Luxury vehicles and supercars have also followed this upward trend.

Glass's Guide has said that there has not been an adverse reaction to record-breaking petrol prices in the used car market, as there was in the summer of 2008, and put this down to several factors.

"Firstly, there is less of the 'feel-bad' factor that pervaded the economy and the market in the summer of 2008. Back then there was also an added buying disincentive in the shape of the large VED [vehicle excise duty] increases planned for the following April and plentiful used car supply," commented Adrian Rushmore, managing editor of Glass's Guide.

However, he advised motorists to consider fuel prices in their choice of purchase, not only at the time of buying, but also how they are likely to change over the period of ownership.

"Fuel is the second largest cost of vehicle ownership, so there is a strong argument that all used car buyers should give more consideration to pump prices," he commented.

A penny will be added to fuel duty in October and a further 0.76p will be lumped on top of that in January 2011, while a commitment to the fuel duty escalator will see pump price rises rise by inflation, plus 1p a litre each year between 2011 and 2014.

The new government could also bring about rises in prices if VAT is increased and a duty hike is introduced in the first Budget after the election.

Other research from Carmony.co.uk has suggested that there is a variety of used vehicles that are currently sought after in Britain, but the Volkswagen Golf is the most popular.

"The Volkswagen Golf has always been a favourite with the British motorist," confirmed Alan Hazelhurst, managing director of Carmony.co.uk.

Second on the list of the top ten most searched for cars was the Fiat 500, followed by the Ford Focus. Backing up Glass's Guide's report, there were plenty of luxury vehicles and 4x4s in the top ten.

The Jeep Cherokee was fourth, the Audi R8 came in fifth, with the Audi A3 following up in sixth, the Land Rover Freelander was seventh and the Chrysler Voyager took ninth place in the list. The top ten most searched for cars by manufacturer also endorsed Glass's Guide's report. Audi, Mercedes, Porsche and Range Rover all made the list.

It seems that buy practices are also changing, with more people searching on the internet for used cars. The UK's largest online used vehicle retailer, Autoquake.com, recently reported that record numbers of buyers are willing to buy online.

Research by the company found that the number of people who would be happy to consider purchasing over the internet has increased by 14 per cent over the last three years, while conventional places to shop for a used car all became less popular during the same period.

Whether shopping online or via a dealer, it seems that traditional considerations are still important for motorists, despite the scrappage scheme encouraging many more people to buy eco-friendly models.

Research by Carmony.co.uk has found that environmental concerns are low on the priority list for buyers, with just a fifth saying they would consider green credentials when it comes to purchasing their next car.

Price is still the deciding factor, with 84 per cent of respondents to the website's survey citing this as the top consideration. Current mileage, age, reliability of brand and service history all made the top five.

In addition, the mechanical state of the car, the cost of running it, the reliability of the model, how the car runs and the colour all came ahead of environmental concerns, making up the remainder of the top ten.

"Even though the worst of the recession appears to be over, consumers are still looking for the best deal, sacrificing the environment and choosing a car that suits the budget, not the green conscience," commented Alan Hazlehurst.

"It will be fascinating to see if this dynamic continues, as the economy accelerates away from recession. But this research does reinforce the need for cost-efficiency in the environmentally friendly alternatives," he added.

08 Jun 2010