BCA report reveals dealer values rise
According to the 25th edition of the Used Car Market Report, published by BCA in association with the Centre for Automotive Management, University of Buckingham, the value of used car sales in 2014 reached £45.1 billion – a year on year increase of 5.6% and an all-time high for the sector.
Dealers account for £34.3 billion (78.3%) of all used car sales and 4.1 million sales, equivalent to 57% of all sales.
A total of 7.2 million used cars were sold last year as the market maintained a strong performance in the post recessionary period. Alongside the 2.5 million new car sales figures reported by the SMMT this resulted in a ratio of 2.9 used cars sold to every 1 new car.
The collective value of the UK new and used car markets leapt to £88.5 billion in 2014 up from £79.4 billion in 2013, with used vehicles accounting for 51% of the total market value.
The BCA Used Car Market Report also provides insight into buying and ownership preferences amongst UK motorists, based on consumer research conducted earlier this year. Significantly, it identifies changing attitudes to the used car buying process with the hands-on experience – in the form of the test drive – becoming more important than in previous years. For 22% of the motorists surveyed, the test drive was the most important influence on their choice of used car – rising from 16% last year.
Customers are increasingly researching online and then completing the deal in the showroom. Those visiting a dealership are at a fairly advanced stage in their buying process and are checking the look and feel of a car, making the test drive an increasingly important element. 34% of buyers visited just one forecourt before purchasing a used car, with 20% visiting up to five before sealing the deal. Perhaps surprisingly, 28% of buyers claim to have visited no forecourts at all in their search for a car, this number being dominated by private-to-private sales. On average buyers visit 1.73 forecourts during the buying process.
And the majority of buyers are visiting local dealerships – 42% spend less than 20 minutes travelling to buy a car with just 17% prepared to spend more than an hour.
The report also shows how the mix of used cars is starting to change. Average age rose to 7.8 years in 2014, meaning the average car is now one year older than it was a decade earlier. The report suggests continuing strong new car sales will result in average age declining and predicts a small fall by the end of 2016.
Car ownership is also on the rise, from a five year low of 69% of households in 2014 to 75% in 2015 and 12% of motorists are likely to buy a car in the next 12 months – of those, almost three quarters (72%) said they would buy a used car in 2015.
Hatchbacks remained the most popular model amongst used car buyers – increasing 7% year on year to a total used car market share of 51%. Diesels accounted for 36% of those bought by respondents which represented a fall of one percentage point compared to the previous year.
‘The 25th edition of the BCA Used Car Market Report provides valuable perspective on this important part of the UK automotive industry’, explained Spencer Lock, group managing director, BCA.
‘Used car market values rose to record levels, as did the combined value of new and used cars sold. A record-breaking £88.5 billion was spent on used and new cars last year.’
‘Dealers continue to generate significant volume and value in the used car market, representing nearly 80% of the total market value and 57% of the total volume.’
Lock added, ‘The shape of the used car market is likely to change as the new cars sold in the last 3 or more years start to feed into the sector in greater volumes. Dealers that have had to focus increasingly on older vehicles should find growing volumes of younger used cars available to meet the needs of their customers.’