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Used car analysis: colour does matter when it comes to selling a car

By Christopher Crow, chief editor, CAP

We are all familiar with the trade phrase ‘right colour’ in relation to the desirability of a car.

Nor is it news to anyone that colour is right up there with manufacturer options as key to the resale value.

This is why many company car funders are understandably reluctant to allow full colour choice, electing to limit choice to traditional colours on the basis that some fashion colours may have only short-term appeal.
So what is the right colour to choose when selecting a car and what sort of premium can you expect to achieve over a poor colour in the used market? First, we need to look at new car colour choices.

Black has consistently delivered a solid performance accounting for around 25% over the last five years, but it is silver and grey that have dominated the colour charts accounting for more than 40% of all new cars sold throughout this period.

However the popularity of these two colours has waned somewhat from the peak in 2008 falling to less than 35% in 2011.

In contrast the popularity of white has expanded over the same period capturing more than 15% of new car sales in 2011, up from a paltry 2% in 2007.

The supply of cars into the used market, of course, takes some time to reflect choices in the new market. So, after three to four years, as the chart below illustrates, white cars account for less than 5% in 2012.

If we look a little further into the detail the analysis reveals that out of the five year old cars sold the proportion of white cars represented around 1%.

In contrast, out of the one-year-old cars sold white represented around 8% so we can see that flow of white cars filtering back into the used car market.

So how do the various colours perform in the used car market?

Reviewing CAP’s disposal data over the last five years black, silver and grey all performed consistently in line with the overall market.

However, colours such as blue, orange and red underperformed while gold, green, maroon and turquoise were complete howlers, costing the unfortunate owners anywhere between 4-6% against CAP Clean.

On the face of it, the strong performance of colours such as indigo, pink, purple and yellow may be somewhat surprising, but this of course reflects the niche and often sporty cars wearing them.

They are therefore not representative of the run of the mill mass market.

However, it is white cars which outperform the whole market, beating other widespread colours, like blue, by up to 6% and green by up to 8%, depending on colour-type and condition.

When considering the impact of colour on the trade performance of a vehicle, the time it takes to sell a car is revealing. Analysis of CAP’s May 2012 disposals data (at the time of writing) illustrates this point well.

A significant volume of black, silver and grey cars sold so far in this month taking around 9-11 days to sell.

Somewhat surprisingly the less popular colours of green, beige and gold have been selling significantly quicker at around six days.

More astonishing though is the time it has taken to sell popular white cars which, at 13 days, have taken over twice as long to sell as the least popular colours.

So what can we conclude from all this?

The May data certainly bears out what our Black Book Live editors so often say – that something ‘a bit different’ can often attract more interest than the usual offerings.

But in general, for new cars, changes in the relative popularity of colours evolve slowly. And, unsurprisingly, popularity is transferred over time into the used car market over a period of three to four years – reflecting the typical change cycle.

The slowly evolving nature of colour popularity means there are rarely any major surprises in terms of trade and consumer preferences.

But just because a colour is highly sought on a new car this does not mean it will be the first to sell in the used market, as the recent performance of white bears out.

But it is clear that the most popular new car colours do generally achieve a premium when they reach the used market.

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