Confidence in the used car market is approaching record levels, according to Cap, with sales almost 10% higher in May than the same month last year.
Cap's Used Car Confidence Index shows that sales last month rose by 8.3% compared to May 2000. This is the third time in 2001 that monthly sales have been up year-on-year.
The Cap rating for May was +61 (see Fig 1). The highest ever, in December 2000, was +63.
Used car dealers in the North east are the most confident that used car business will improve. Those in the Midlands and Yorkshire believe the market will remain stable over the next few months. Very few, says Cap, reported that the market would decline.
Six of the nine regions surveyed out-performed May 2000. The Midlands showed the highest increase on last year with a 20.1% leap in sales, followed closely by the North west, up 17.1%, the South west and Wales up 14.3%, the North east 13.2% and Scotland 10%. Sales in the South east and London improved by 4.4% - below May UK average of 8.3%.
The three poorest performing regions were Yorkshire – down 5.4% - followed by Northern Ireland and Anglia, down 3.2% and 1.9% respectively.
A Cap spokesman said: “Currently used car prices are increasing which suggests strong demand in the market. This month's index confirms this with outstanding used sales – resulting from the release of pent-up demand from last year's new car pricing debate.”
Dealers were also asked whether they thought the change in VED to benefit drivers of smaller engined cars has had any effect on customers' car choice. The majority (65.7%) said it had no effect, with some customers unaware of the reduced level on vehicles below 1,500cc.