BCA Used Car Market Report 2012
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1 NEWS RELEASE 23 August 2012 BCA Used Car Market Report 2012 Used car market demonstrates resilience in choppy economic waters Buyers turn to older used cars as supply issues continue The used car market weathered the continuing economic storm to increase in both volume and value last year according to the newly published 2012 Used Car Market Report from BCA. However, reflecting the economic backdrop, growth was slower last year and average values remained relatively flat. The report, authored by Professor Peter Cooke from Buckingham University Centre for Automotive Management suggests there will be changes ahead as the used car market deals with the effects of the second recession in four years. Bespoke consumer research* commissioned by BCA also shows how motorists are changing their buying habits as they deal with the continuing economic pressures. According to the 2012 BCA Used Car Market Report, 6.7 million used cars were sold last year for a combined value of 35.7 billion the highest value ever recorded. Average car values remained flat at 5,336. The record value was achieved against the background of a struggling economy, falling family incomes, high unemployment and stubbornly high inflation. More used car buyers were forced to turn to older used cars as supply issues continued to affect the wider used car market. Sales of cars aged 5 years and under slipped back by 183,000 units last year. Dealers dominate in sales of these younger cars, but as supplies are under pressure they are increasingly focusing on cars aged 6 to 8 years. Sales of cars aged over nine years continued to rise, by 177,000 to over 2.5 million units representing 37.8% of the totals with private-to-private sales dominating in this sector.
2 Tony Gannon, BCA Communications Director commented The used car sector is now experiencing the full effect of the lower new car sales since the onset of the recession in 2008 and this is changing the dynamics of the marketplace. The diminishing supply of quality cars under five years old means used car retailers are having to extend their focus to include vehicles in the 6-8 year age group, where there is a stronger supply as a result of the higher new car volumes in the early 2000s. In fact, dealer sales of cars aged 6-8 years rose by 63,000 units to 1.1 million last year. He added There are also many more older cars on Britain s roads than at any time in recent history and these cars are being kept longer before being scrapped. The number of used cars aged nine years and over sold last year rose by 7.5% while sales of cars aged under five years declined by 7.2%. Older cars are increasingly becoming a fact of life for car dealers and used car buyers and will be going forward as supplies of younger used cars may well remain low for up to a decade. Gannon continued This latest edition of the BCA Used Car Market Report paints a picture of a used car industry evolving to deal with the changing economic landscape. With an ageing parc of vehicles and limited supplies of younger cars available, both dealers and motorists will have to get used to a marketplace where the typical used car is both older and higher mileage than has been the norm in previous years. The Consumer Research: Choosing a used car As well as analysing sales data for 2011, the BCA Used Car Market Report looks at consumer motoring habits and car buying activity. The findings of research conducted amongst 4,000 motorists reveal some subtle changes in behaviour as economic conditions continue to be tough. For the first time on record, the influence of family and friends (24%) is the most important factor when motorists choose a used car, overtaking personal experience (21%) which has declined sharply in importance in recent years down from 40% plus in pre-recession years. Independent internet sites are now rated third most important (16%), having moved up from fifth place last year. There s plenty of food for thought for anyone involved in retailing used cars as newspaper adverts, dealer advice and car TV advertisements score relatively lowly. And the importance of internet sites such as Twitter and Facebook came in at just 2%, which suggests the value of a social media strategy to drive sales should be closely scrutinised.
3 Price remains the most critical factor for used car buyers, with 41% saying this would be their first priority, up by one point from last year. Low mileage is now the second most important factor for used car buyers at 31%, up three points and overtaking make/model which slipped five points to 30%. When choosing a dealer to buy from, getting a good deal (33%) and the right car at the right price (29%) are the most important factors. Used car buyers also value the opportunity to trade-in and prefer to do business with a local dealer (both at 19%). What to buy next? The number of motorists who think they or a family member will certainly or quite likely buy a used car in the next 12 months dropped three points in this year s survey to 11% and has declined sharply since pre-recessionary times the figure stood at 18% in Three quarters of car owners plan to buy a used car next time they change, while the number of motorists planning to buy a nearly-new car remained at 6%, compared with 9% in Petrol remains the dominant fuel type, with 43% of motorists saying they will choose petrol power next time they change. Support for alternative fuels has fallen back, with hybrids and other alternatives (including electric) being chosen by 2% of motorists (down from 3% last year) There continues to be a potential mismatch between diesel car supplies and demand however 50% of new car sales are diesel, while just 30% of potential used car buyers say they will choose diesel next time. Looking ahead, the report suggests that continuing economic pressures and the double-dip recession are going to significantly change the type of vehicle motorists want to buy. Buyers are increasingly looking to buy cars with better fuel consumption (27%) and lower road tax (20%). A smaller car (14%) is much more likely to be purchased than a bigger car (2%) in the current economic climate. Car ownership patterns changing The BCA research shows that the economic downturn has had a marked impact on the pattern of UK car ownership. While single car households have remained steady at 72%, multiple car families are diminishing. Three car and more households have fallen to 5% compared to 8% last year and overall multiple car households are down by two points, year-on-year at 27%. In 2008, 31% of households had two or more cars.
4 Headline Data Volumes 6.7 million used cars were sold last year, up from 6.6 million in 2010 and 6.3 million in 2009 Dealers sold 3.74 million cars last year, a rise of 2% year-on-year. Private-to-private sales accounted for 2.63 million cars, climbing 7% compared with The balance (0.3 million) were acquired through alternative routes (gifts, inheritances, auctions etc) Sales of cars aged under two years fell by 9.5% to 642,000 units (9.6% of the total) Sales of cars aged three to five years fell by 6.2% to 1.73 million units (25.8% of the total) Sales of cars aged 6 to 8 years rose by 7.4% to 1.79 million (26.8% of the total) Sales of cars aged over nine years rose by 7.5% to 2.53 million (37.8% of the total) Values: The value of the used car market was 35.7 billion in 2011, compared to 35 billion the previous year. This was 6.7 billion higher than the new car market value of 29 billion. Dealer sales of used cars rose to 26.8 billion (up 0.3 billion), accounting for 75.1% of the total market value. The total value of private-to-private sales was 7.4 billion, up 0.6 billion, year-on-year and accounting for 20.7%. Average Car Data The average used car value in 2011 was 5,336, compared to 5,332 in 2010,. The average value of used car purchased from a dealer declined by 126 (-1.7%) to 7,169 last year. The average value of a car sold privately improved by 66 (+2.4%) to 2,815. The average age of car on UK roads in 2011 was 7.44 years, up from 7.25 years in % of used cars purchased last year were hatchbacks, 22% saloons, 10% MPVs, 7% estates, 4% offroad, 4% sports/coupe, 2% micro/city and 1% prestige. The balance (3%) was other body types. The Used Car Market A 2012 Report by BCA The Used Car Market Report was written and produced for BCA by Professor Peter N C Cooke and the automotive group at The Centre for Automotive Management, University of Buckingham Business School, The University of Buckingham, Buckingham, MK18 1EG
5 *Consumer research by BMRB International, based on interviews with 4,000 respondents, representative of the UK adult population aged 17 years and over. Fieldwork for this research was undertaken during March The Report is published August 2012, softback, A4, perfect bound, 100 pp. Also available electronically in PDF format. ENDS Issued by: Tim Naylor Tel: Public Relations Manager Fax: BCA Mob: Auction Centre, Blackbushe Airport Blackwater, Camberley, website: Surrey GU17 9LG
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