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Taking Stock: A record year for used car sales after a 5.6pc increase.

Time 2:14 pm, October 1, 2015

BCA has just published its 25th Used Car Market Report…  and it provides a fascinating insight into the state of the industry.

According to the 25th edition of the Used Car Market Report, published by BCA in association with the Centre for Automotive Management, University of Buckingham, the value of used car sales in 2014 reached £45.1 billion – a year-on-year increase of 5.6 per cent and an all-time high for the sector.

Dealers account for £34.3 billion (78.3 per cent) of all used car sales and 4.1 million sales, equivalent to 57 per cent of all sales.

A total of 7.2 million used cars were sold 
last year as the market maintained a strong performance in the post-recessionary period. Alongside the 2.5 million new car sales figures reported by the SMMT, this resulted in a ratio of 2.9 used cars sold to every one new car.

bca logoThe collective value of the UK new and used car markets leapt to £88.5 billion in 2014, up from £79.4 billion in 2013, with used vehicles accounting for 51 per cent of the total market value.

The BCA Used Car Market Report also provides insight into buying and ownership preferences amongst UK motorists, based on consumer research conducted earlier this year.

Significantly, it identifies changing attitudes to the used car buying process with the hands-on experience – in the form of the test drive – becoming more important than in previous years.

For 22 per cent of the motorists surveyed, the test drive was the
 most important influence on their choice of used car – rising from 16 per cent last year.

Customers are increasingly researching online and then completing the deal in the showroom. Those visiting a dealership are at a fairly advanced stage in their buying process and are checking
 the look and feel of a car, making the test drive 
an increasingly important element. Thirty-four per cent of buyers visited just one forecourt
 before purchasing a used car, with 20 per cent visiting up to five before sealing the deal.

Perhaps surprisingly, 28 per cent of buyers claim to have visited no forecourts at all in their search for a car, this number being dominated by private-to-private sales. On average, buyers visit 1.73 forecourts during the buying process.

And the majority of buyers are visiting local dealerships – 42 per cent spend less than 20 minutes travelling to buy a car, with just 17 per cent prepared to spend more than an hour. The report also shows how the mix of used cars is starting to change. Average age rose to 7.8 years in 2014, meaning the average car is now one year older than it was a decade earlier.

The report suggests continuing strong new car sales will result in average age declining and predicts a small fall by the end of 2016.

Car ownership is also on the rise, from a five-year low of 69 per cent of households in 2014 to 75 per cent in 2015. Twelve per cent of motorists are likely to buy a car in the next 12 months – of those, almost three-quarters (72 per cent) said they would buy a used car in 2015.

Hatchbacks remained the most
 popular model amongst used car
buyers – increasing seven per cent 
year-on-year to a total used car market 
share of 51 per cent. Diesels accounted
 for 36 per cent of those bought by respondents, which represented a fall of one percentage point compared with the previous year.

Spencer Lock, the group managing director of BCA, said: ‘The 25th edition of the BCA Used Car Market Report provides valuable perspective on this important part of the UK automotive industry.

‘Used car market values rose to record levels, 
as did the combined value of new and used cars sold. A record-breaking £88.5 billion was spent on used and new cars last year.

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‘Dealers continue to generate significant volume and value in the used car market, representing nearly 80 per cent of the total market value and 57 per cent of the total volume.’

Lock added: ‘The shape of the used car market is likely to change as the new cars sold in the last three or more years start to feed into the sector in greater volumes. Dealers that have had to focus increasingly on older vehicles should find growing volumes of younger used cars available to meet the needs of their customers.’

BCA commissioned TNS-BRMB to carry out research with 4,000 used car buyers in the UK to identify their priorities and experiences in buying and owning a used car. The research was carried out in March 2015. Market volume and value figures were prepared by Emeritus Professor Peter N C Cooke and the Centre for Automotive Management, University of Buckingham.

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