stay tough throughout 2008
Data company Experian’s
used car sales figures for 2007 show a 2.4 per cent decline
year-on-year in volumes – the largest annual drop since 2005.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
Moreover, it warned, used car dealers should not expect a better
business climate in 2008. “Consumer sentiment remains cautious,”
Experian said.
Kirk
Fletcher, managing director of the automotive division said: “A
slow housing market and the squeeze on spending have left consumer
confidence low and this, in turn, hit the used car sector hard last
year. The industry recorded the highest drop in sales (down 2.4 per
cent) since 2005, when used car sales first started falling.”
He noted that new car sales – which grew by 2.5 per cent overall
in 2007 – had been better insulated from downward pressures on car
sales during the past 12 months. A strongly competitive market in
which many new models were launched with “discounts and promotions”
had helped stimulate consumer interest, Fletcher said.
In addition, greater green awareness on the part of the general
public – along with rising running costs – meant consumers “will
continue to spend cautiously”, Fletcher predicted.
“Consumers are more aware of the extra costs of running a car
and want more information upfront before making a decision,” he
said, although this appetite for knowledge could prove to be of
benefit to dealers who are “on the ball” and prepared to take
advantage of opportunities which come their way.
Falling loan values?
Experian found that the age group which recorded the largest
increase in sales – 3.3 per cent – was cars between five and seven
years old.
However, this news could worry motor financiers, as loans taken
out by buyers of older, cheaper cars will be smaller in value than
for younger, more expensive cars. Buyers may even prefer to forego
a loan altogether, preferring to save up money to purchase a
vehicle outright.
Fletcher added: “The popularity of older cars may be linked to
the increasing difficulty consumers are facing when trying to get a
bank loan.”
|
Age |
2007 |
% change from |
|
0-6 months |
371,268 |
1.8 |
|
7-12 months |
403,974 |
-5.9 |
|
1-2 years |
456,526 |
-8.9 |
|
2-3 years |
530,265 |
-8 |
|
3-4 years |
735,982 |
-3.7 |
|
4-5 years |
566,506 |
-4 |
|
5-6 years |
548,287 |
6 |
|
6-7 years |
515,775 |
0.1 |
|
7-8 years |
520,751 |
-2.4 |
|
8-9 years |
536,955 |
-2.5 |
|
9-10 years |
540,597 |
2.6 |
|
10 years +
|
2,048,691 |
-2.6 |
Source: Experian’s Business Strategies division and
DVLA
Motor Finance Issue: 41 – March 08
Published for the web: April 2 08 17:11
Last Updated: April 2 08 17:24
