The used car market is set for a strong 2016, despite the levelling off of consumer new car sales witnessed in 2015, The National Association of Motor Auctions (NAMA) has claimed.
The Association said: "As the economy improves, it appears that a wider demographic of consumers is returning to the market. Their natural leaning towards a used purchase is being facilitated by the availability of PCP finance on cars up to 5 years old at the outset of an agreement."
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Concerns had been expressed that PCP in the new car market might lead to a flood of young, low mileage cars in good condition, distorting the market, but NAMA said it had not seen this occur.
Instead, it said that the remarketing industry has returned to what it described as a ‘steady-state’ for the first time since the economic downturn began.
It added: "The supply/demand equilibrium is in a good place, aided by increased access to stock funding. Volumes are good and pricing reflects the good balance of supply/demand. The overall position is that activity through NAMA members has increased in 2015 and the outlook is for a further increase in the year ahead."
A key driver for the further increases in 2016 will be consumer demand, the organisation added.
Louise Wallis, head of businesses development at NAMA, said: "It seems clear that franchised dealers are switching even greater attention to the retailing of used vehicles.
"Many are self-generating used car stock and some of the very largest groups are promoting their car buying activity through national television advertising. Even then, activity at our members auctions and online is on an upward trajectory that is outperforming new car registrations that we expect to continue into 2016."
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