The superlatives being used to describe the state of the used car market are a clear insight into the strength of sales: phenomenal, buoyant, unprecedented have all been used by experts at CAP, BCA and Manheim during the last couple of months.
Yet, what is going on in the mind of the consumer that has driven them to the auctions and used car supermarkets in their droves?
Has there been a sea-change in their perception of a car without that new car smell that has proved to be an aphrodisiac for so long?
AM went to find out, interviewing customers at Motorpoint, a used car supermarket in Peterborough, to find out what their motivation was, how they were funding their purchase and if and how the economic downturn had influenced their aspirations.
Edward Fletcher (37), from Cambridge:
The 37-year-old MoD employee said he and his wife had been prepared to buy a new car, but for two factors: “No dealer is prepared to budge on price. I think they fear killing the market by flooding it with cut-price deals – although the market is dying anyway. “Also, my parents had a terrible time trying to buy a new car from a Cambridge dealer. They were asked to pay for a test drive and the salesman wouldn’t discuss anything over the telephone. ‘You have to come in to talk to professional sales staff’, they were told.”
Lee Jarvis (20), from Peterborough:
He epitomises a victim of the recession. He worked in the building trade as a plasterer until he was made redundant as the recession hit the house building market. “I can’t afford the insurance on my Ford Fiesta ST. It’s group 15 and since losing my job I need to replace it with something sensible. When I was working I would go for something with good acceleration and a bigger engine. But now I need to consider whatever’s cheapest. “I would still consider buying from a dealer. My Ford came from TC Harrison in Peterborough.”
County court bailiff Alfie Atkins (57) from Peterborough:
“I need a car for work. The one I have now is getting on a bit so I don’t have a choice. “The rise in fuel costs and personal taxation have been the biggest influence on my buying decisions and not the economy. “I am looking for a diesel, with a low VED cost. “I will be buying a Renault Clio, Peugeot 207 or Vauxhall Corsa on PCP. My credit rating is good.”
Grace and Thomas Harris (both 77), from St Neots,
They are looking for a one to two-year-old Ford Fiesta automatic with about 10,000 miles. She said: “We’ll spend our savings on it plus get a trade-in on our manual Peugeot 206. While we’re older than the average car buyer, we are conscious of the deals around on new cars, but actually you can get a lot more for your money on a used car right now.”
Richard Stokes (46), from Ramsey, near Hintingdon:
“I usually buy low mileage cars and change them every four-to-five years. “I’ve been this way for the last 15 years and because I’m in a reasonably secure position job-wise at the moment I see no reason to change my buying habits or my budget despite the economy. “I have my heart set on a Fiesta. If the deal’s right I will buy it. “I am looking to get finance too. I don’t know where it will come from, but I’m happy in having monthly payments. I’ve had no problems before.”
Nigel Farmer (43), from Bourne,Lincolnshire:
He is looking for a Chevrolet Captiva because of its seven seats. “My wife and I are both in full-time work and feel pretty secure. “I’ve used the internet to do my research and I’ve been looking at new cars as well as used. I like the look of the discounted prices there are around. I’m shopping around more than usual for a bargain because there are more out there now than usual. But, I know my spending limits and will not exceed them. I don’t need finance – I have savings.”
Jonathan Lishman (39), from March, near Peterborough:
He has opted out of a company car and is looking to pay cash for a BMW 3 Series or Volkswagen Golf GTI, new or less than a year old. “I’m hoping the state of the market will mean I get a better deal. But, having looked around, I’m surprised I haven’t seen any movement in price. I have bought from dealers in the past, but they can’t seem to match the car super-markets. Maybe it’s because their overheads are higher or they don’t have the same buying power.”
Virginia Weller (62), from Greenwich, London:
She was at Motorpoint to collect a 7,000 mile, 57-plate Vauxhall Corsa which she had paid £7,600 for on trade-in.
“I needed to get rid of some money that I’d put into the Anglo Irish Bank. It was nationalised in January (part of a €400 billion guarantee scheme for six banks). The Irish economy is in a worse state than yours and a friend of mine at Morgan Stanley recommended I spend my savings. I wasn’t certain my money was safe and investing in a car made sense since I needed one.”
“The state of the economy is having an impact on customers’ buying decisions. Gone are the days of unlimited credit and people are more cost-conscious and are willing to travel further to track down a deal. We’ve had people from Norwich and Essex visit our Peterborough centre.
“Cash is important and we’ve seen people spending their savings as interest rates are so low now. Those using finance are choosing PCPs over HP now as they are not taking the RV risk and the car has a guaranteed future value to them.”
He said there was a perception among customers they would need to downsize, particularly from 4x4s.
“But instead we are getting them into the car they wanted, but now it’s three to four months old. Before the crisis they would have bought new.”