Confidence. You cannot see it, you cannot touch it. What you can do, however, is feel it. In the past fortnight everyone I have quizzed about the state of the new car market has spoken positively about the incredible deals out there, the availability of credit and the willingness to explore creative ways of working in exceptional times.
But time and time again when asked why this combination of factors isn’t turning the market fortunes around, industry watchers and dealers alike have blamed a lack of confidence.
But there are signs though that the dynamics of the economy should mean a healthy time for new car retailers. A study from the Institute for Fiscal Studies reveals younger and richer households are enjoying a boom time, with lower mortgage payments and falling motor fuel bills.
One analyst said a household with a £200,000 mortgage and an interest rate tracking the Bank of England’s Bank Rate, should be enjoying a £500 per month boost.
So why aren’t the spenders spending? Fear of losing your job in a downturn has a enormous influence. But conversations with ‘real’ people, ie members of the public, has led me to consider another possibility.
A used car buyer got in touch with me (you can read a report on his experiences on page 16) and I’ve talked to several people browsing at a used car supermarket and even a taxi driver told me about his experience buying a new car: what they all shared was confidence.
For years now consumers have been exploiting the research opportunities of the internet and now allied to the endless tails of woe amongst carmakers and retailers purportedly on their knees, customers are hungry for a deal and ultra-sensitive to when they don’t get the price – or the service – they expect. And with the equality of the economic squeeze meaning many more of us are in the same boat, who cares about buying a new car like clockwork to keep up with the Joneses? Take me to the used cars, they are saying in unprecedented numbers.