9:16 am, January 16, 2023
Vertu boss Robert Forrester says that demand for used cars has risen in recent months, despite the cost-of-living crisis resulting in changes in customer behaviour.
Speaking to BBC Radio 4’s Today Programme, the Bristol Street Motors CEO, said that sky-high energy bills have led to a boom at the budget end of the used car market.
The 53-year-old believes that dealers are now experiencing a drop off in demand for expensive new cars, in favour of more affordable models.
He put the change in market dynamic down to customers wanting to reduce monthly payments and avoid large bills.
‘I think customers are actually quite sensible and the trends that we are seeing in demand would highlight that,’ he told host Sean Farrington.
‘Cheaper used cars are highly sought-after by customers. People might want to reduce their monthly payments or they might be wanting to avoid a big repair bill on their existing older car so the demand for cheaper used cars is very strong.
‘I think the demand for more expensive new cars continues to be off so that would fit the narrative that people are very mindful and careful. I think at the moment, when your energy bills land it’s very much a case of “oh dear that was an interesting one”.
‘There is no one customer in the UK. We sell Ferraris right down to £6,000 used cars.
‘We are certainly seeing a trend whereby people are looking carefully at their monthly payments, they are trying to avoid cars that are going to cost them a lot of money in maintenance and actually we are seeing a rise overall in demand for used cars.’
Another consequence of the cost-of-living crisis has been rising interest rates, which has impacted the packages that dealer groups are able to offer their customers.
Forrester says the days of 0 per cent finance packages are now in the past, with base rates now starting at just below seven per cent.
He added: ‘Over the past 12 months we’ve seen interest rates being charged by finance companies going up.
‘Obviously base rates have gone up so whereas 12 months ago if we had a special used car event we would offer 0 per cent finance, now the base rate is 6.9 per cent.’
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