2018 will be the year of the used car, particularly diesels.
When Cap HPI Black Book senior editor James Dower (pictured) takes to the stage as part of AM Live’s insight theatre on used cars, he will highlight the on-going appetite among drivers for used diesel vehicles.
He said: “We will see used car prices go up in October and stabilise in November.
“As new car registrations continue to deplete, the 2018 focus will be on used cars.
“For us, the challenge is making sure dealers are tuned into the opportunity and make the most of it.
“New car prices are going up and the exchange rate makes it impossible for manufacturers to pump volume into the UK market, plus their margins are slimmer as a direct result of the devaluation of the pound.
“Consequently, dealers are taking a step back from new car volumes and that will continue in 2018.
“Meanwhile, a rise in PCPs to fund used cars has fuelled the market further as monthly payments are often more affordable than those with a traditional HP.
“There has been a notable drop-off of around 8% in new car registrations for diesel with a corresponding shift towards petrol hybrid which is fuelling the growth in the alternative vehicle market, some 5% plus up in August. But, it’s not an issue for the used car market.
“Yes, diesels are experiencing some depreciation, but it’s not huge. For example, on a VW Golf Match TDI around 12 months old, depreciation will be about £184 over three years.
“There will always be a buyer for a diesel car. However, dealers do need to be mindful of the mix.”
Reach out to electric car customers
Whilst EVs still make up a proportion of the alternative vehicle market, it is only around 10% compared to 90% of petrol hybrids, much of it driven by Toyota and Lexus, so dealers need to weigh up much when deciding to put EVs on their forecourt.
“Dealers need to establish who the customers are and how to reach them. Someone who commutes 20 miles every day and has access to a charger will be right for an EV, but it’s identifying those people.
“There are no additional subsidies for buying a used EV unlike new and there’s no financial help for the installation of a home charger.
“Dealers and manufacturers serious about selling used EVs need to look at the whole proposition. It needs to be sold as a package including the installation of chargers, and manufacturers and dealers will need to put that together.”