The continuing strength of the sub-£5K used car market shows that value-for-money motoring is likely to persist well into the economic recovery, says The Warranty Group.
With real world wages having fallen quite dramatically for a large proportion of the population during the last few years, there is an ongoing demand for quality, low-cost cars.
Ian Simpson, sales and marketing director, said: “There is perhaps an expectation that the burgeoning economic recovery should see people start to spend more money on cars right across the used sector.
“However, this is not happening and is unlikely to do so. The recession has left a lot of people feeling much worse off and that situation is unlikely to change for quite some time.
“This is the key reason why dealers specialising in the sub £5K sector continue to do well if they retail quality, low cost cars that are likely to provide value for money motoring.”
A key factor, Ian explained, was that customers buying in this area of the market were very keen to avoid unexpected motoring costs.
“At the start of the recession, we saw a definite increase in demand for longer and more comprehensive warranties as customers looked to minimise the possibility of being hit with large bills.
“Perhaps surprisingly, this demand is continuing into the economic recovery. There is a genuine desire to put a ‘safety net’ in place around the vehicle to provide a high level of cover.”