Fall in new registrations means boost for used car market
Vehicle data company Cazana has reported that falling numbers of new car registrations have led to a boost in the used car market.
This follows the Society of Motor Manufacturers and Traders’ (SMMT) report on Monday which showed that the new car market was down 2.9% in October in comparison with the previous year. The market is down 7.2% so far this year in comparison to 2017.
Despite a general lack of consumer confidence, the number of used retail buyers has been boosted by new car buyers unable to find the car they want and, in some cases, people seeking to spend less money.
Rupert Pontin – Cazana
Director of valuations at Cazana, Rupert Pontin, says that the disruption in the new car market has pushed some new car buyers into the used market.
Pontin said: “Despite a general lack of consumer confidence, the number of used retail buyers has been boosted by new car buyers unable to find the car they want and, in some cases, people seeking to spend less money.”
Confusion in the new car market has been caused by anti-diesel rhetoric, higher Vehicle Excise Duty (VED) charges for new diesels and cuts made to the Plug-in Car Grant. The new Worldwide Harmonised Light Vehicle Test Procedure (WLTP) has also been blamed for supply issues during September, which saw a 20% slump in profits for dealerships.
Cazana’s data showed that there is a good level of demand for used cars which are currently in short supply. Pontin said in his statement that the new car supply issue will remain “for the foreseeable future”, which is good news for used car dealers nationwide.
Pontin added that the expected drop in retail pricing in order to stimulate demand hadn’t happened. He said that “the opposite is actually likely to be the case”.
He continued: “Retail price performance across all key sectors shows an increase in value as a percentage of original cost new with the best performing profile being the 12-month-old vehicle with a four percentage point increase when compared with the same month last year.
“This is the result of the new car stock shortage with dealers able to achieve higher prices when selling to what were intended to be new car buyers.”