7:09 am, October 13, 2022
Used car buyers are negotiating even harder over prices because of the cost-of-living crisis.
That’s according to Startline Motor Finance, which said nearly one in three dealers (32 per cent) of 55 dealers quizzed for its October Used Car Tracker had reported the tougher stance.
Other effects of the current economic difficulties highlighted by the research include consumers becoming more price-sensitive (82 per cent), increased interest in cars with lower running costs (70 per cent), a preference for cheaper models (52 per cent) and reduced showroom footfall (36 per cent).
Startline Motor Finance CEO Paul Burgess said: ‘There are perhaps mixed signals here.
‘Our experience is that the used car market remains relatively strong, largely thanks to continuing poor supply and ongoing robust demand.
‘However, the research shows that the cost-of-living crisis is starting to affect consumer behaviour noticeably, with more interest in cars that are cheaper to buy and cheaper to run, as well as increasing sensitivity over pricing.
‘There is clearly a sense in the market that the economic situation is worsening, and really the question for the sector is whether this starts to affect demand to such an extent that sales begin to fall. To us, this still seems some distance away.’
The Startline Used Car Tracker also showed that 85 per cent of dealers expect the cost-of-living crisis to hit used car prices and values in the fourth quarter of this year with 31 per cent expecting this to be significant, 42 per cent moderate and 27 per cent small.
Dealers were also asked how the cost-of-living crisis was affecting motor finance, with 77 per cent saying consumers were buying over a longer period, 30 per cent that deposits were getting smaller and 30 per cent that they were reducing contracted lease mileage.
There were also signs of increasing nervousness around the switch to EVs.
For October, 55 per cent of dealers named it as a future challenge to their business compared with 40 per cent in September and 32 per cent in August.
More dealers also believed the desire to own a car was falling – it’s now 52 per cent versus 42 per cent last month and 18 per cent in August.
