Used car volumes hit a six-year high of 7.3m units in 2005, according to the BCA Used Car Market Report 2005 produced in association with Sewells. This equates to a used car market value of £32.3bn, up £2.3bn on 2004.
The report states: “Franchised and non-franchised dealers reinforced their grip on the UK used car market in 2005. Dealers sold 3.87m used cars, compared to 3.66m in 2004, accounting for 53.3% of the UK’s used car volumes.
“While private-to-private used car volumes rose by 114,000 units to 2.05m, they failed to keep pace with market growth, their share falling from 41.5% to 40.6% year on year, due largely to a standstill in sales of nine-years-plus cars.”
The three- to five-year-old car segment experienced most growth, up by 10.9%, or 208,000 cars, to an all-time high of 2.11m units. Sales of 0-2 year-old cars dipped by 51,000; however, six to eight year old cars achieved a 66,000 unit increase in sales.
“The annual UK used car market value rose to its highest ever mark of £32.3bn in 2005,” confirmed Tony Gannon, BCA’s communications director.
“And the resilience of the used car market is particularly encouraging, given this year’s downturn in new vehicle sales as well as the general pressure on consumer spending.”
The report highlights some interesting issues among used car buyers:
One in three has bought the used car with a loan, with banks the most popular source. Only one-third say the dealer attempted to sell them any type of finance.
Dealers are more proactive on the warranty front. Half of buyers are offered extended warranty, although just 20% are pitched breakdown cover.
Only one-third of used car owners have been contacted post-sell by their dealer to enquire if they are satisfied with their car or needed a service. One in five have been approached about buying another car.
Half intend to buy their next car from a franchised dealer, but only 10% plan to deal with a non-franchised used car dealer.
Three in ten state their main reason for choosing a particular franchised dealer is because it has the car they want. However, getting the best price is more influential than wanting a specific make or model.
For one in two buyers, price has overtaken make and model as the most decisive factor in choosing which used car to buy. One in three count low mileage as extremely important.
Half state that personal experience of a particular make or model is a decisive factor in choosing a used car, followed by the opinions of their friends and family.
Younger buyers consider getting a good deal is most important, while older buyers look out most for a no-pressure sales process.
The popularity of hatchbacks and saloons slipped in 2005. The hatchback’s market share fell four points to 44%, and the saloon one point to 25%, collectively accounting for 18% of the UK used car market. Ten years ago these ‘niche’ sectors took just 9%.