Used car dealers' sales last year shrank by 8.3% to 3.69m, according to the latest BCA used car market report, after three consecutive years above 4m.
Dealers, though, enjoyed a greater share of the market, taking 54.3% of the 6.8m sector, buoyed by rising demand for nearly new cars. Several years of strong new car sales have ensured good supplies of stock up to two years old, which now represents 15% of used car transactions.
Dealers account for 88% of sales under two years old. They also take 75% of the three-to-five year-old sector and 55% of cars sold in the six-to-eight year-old bracket.
Despite falling new car prices – a survey of 2,600 motorists revealed that 42% believed prices had dropped significantly – 53% of drivers said they could not afford a new car.
Thirty-two per cent said they preferred used cars because they were “better value for money” and 26% were “worried about depreciation” on new cars. This underlines the impact of widespread media coverage on the motor industry, sparked by last year's Competition Commission inquiry into pricing, which has educated consumers about the cost of depreciation on new cars.
The UK has one of the most mature used car markets of any major European country, with sales per thousand people at 114, compared to Germany (90), France (82) and Italy (42). It has a used to new ratio of 3.1:1, also ahead of most other countries.
Dealers in the UK have established one of the most efficient sales structures to encourage motorists to change cars more often, highlighted by the 33% parc turn, second only to Netherlands' 39%.
Motorists tend to change their cars more frequently if the infrastructure allows them to do it swiftly, efficiently and with no great financial penalty, said the BCA report. It added: “The UK also leads Europe in developing vehicle remarketing channels, with established physical routes being supported by a variety of virtual sales processes.