Recently British Car Auctions (BCA) released one of their highly respected annual Used Car Market reports highlighting a clear sale increase in the used car market. Numbers indicate that by the end of 2013 the used car market has completely recovered from the 2008 economic recession and hit 7.4 million units last year – matching the pre-recession volume observed last in 2006.
This is not the only good news from the BCA report: The increased sales volume in used cars fueled a record market value of £42.7bn which is more than the value of £33.9bn recorded in pre-recession 2006. These numbers are connected directly with an increased demand in used cars in contrary to the new car market where the growth is inflated by the government incentives rather than the clear demand from the customers. Used car market volume and the number increase is a clear indication of a true demand and the economic recovery.
New vs Used Car Market trends
The chart reproduced from the data provided by the BCA Used Car Market report 2014 compares the new and used car markets for the same period of 2004 – 2013. This period clearly shows the tendency and the overall market share of new vs used cars. So what can we learn from the chart?
The number of used cars sold compared to the new ones is around 3 to 1. This means that customers prefer to buy used cars rather than new ones 3 times over. There is a factor that used cars are more affordable than the new ones but this is not the entire picture.
Used car sales generated almost the same market value from 2004 and went on to generate almost 23% more than the new car market in 2011. Only recently, due to government incentives programs, the difference went down to 16% but still hit a record value of £42.7bn.
During the recession period in 2008 the new car market sales suffered significantly. The used car market on the other hand had a relatively small dip in the market value and started to recover steadily. In comparison, without government intervention and incentives the new car market would have had a harder time to recover so quickly.
New vs Used Car Market demographics
The BCA Used Car Market report also provides a treasure stove of statistical data on the overall trends regarding what cars customers buy. What is more relevant to us is the percentage of the customers buying new compared to used cars.
The chart shows the demographic difference between new and used car buyers. There are some slight differences between age groups. For example younger customers have slightly less financial resources and would predominantly buy used cars. In contrary, one in three elder customers would tend to buy a new car instead of a used one. Chart shows that in average for all age groups three quarter of customers prefer buying a used car instead of new one. This is not an incidental outcome but already matured choice based on many factors which are highlighted in our take on new car vs used car debate presented recently.
New vs used car : Reasons behind
It is also interesting to see the reasons behind when the customer makes a choice to buy a used car instead of the new one. The dominating portion of used car customers (32%) regard affordability as being the main issue but more and more people think that it is not the only important factor in this equation.
For example over 22% of customers think that used cars provide a better value for the money.
About 15% of car owners believe there is “lower depreciation with used cars” than with the new ones. This is true, since from the moment you drive you car from the new car dealership your car starts loosing its value. Within first 2 years some models can lose almost 60% of their original price.
There is a sizable community of motorists who always prefer to buy a used car – about 12% from all. These are the most experienced and matured used car buyers who know exactly what to buy and how much it should cost.
Around 6% of the customers are under time pressure to get their next vehicle as soon as possible.
4% of customers mentioned multiple reasons to buy used cars.
Whatever is the reason behind your choice, if you have decided to buy a used car then make sure to contact us first. We are a highly qualified car finance broker dedicated to helping you to regain your personal freedom again with one of our low priced used cars.