Contradictory to what some news reports are saying, the used car sales market is enjoying a bigger growth in volume than the new car market – so says Louis Rix, Director at car finance and dealer specialists Carfinance247.co.uk.
Figures* released this week from the Society of Motor Manufacturers and Traders (SMMT) show a 9.2% rise in new car sales in the final quarter of 2012 compared to Q3, 2012.
Reporting on this, the BBC** commented that: Rising prices for second-hand cars, which are scarce following years of weak sales, could also have contributed to a shift in buying patterns.
“This is certainly not the case for us at Carfinance247”, says Mr. Rix, citing a staggering 225% growth in sales volume for Q4, 2012 compared to Q3.
He also highlights a 15% growth in car finance applications for the same period too, which he believes is “indicative of a slow, but sure, returning consumer confidence in the economy.
“With new vehicles losing anything from 12-25%*** of their value in depreciation in less than 6 months, buying a used car from a reputable source makes sense. Our previous research showed that even an ‘average’ vehicle in terms of specification and cost can depreciate by £3,000 within just a few months of being bought from new”.
Mr. Rix summarises: “Of course, it is positive news that the new car sales market has experienced a growth, as this is all good for the economy. Our figures, however, highlight an even bigger surge in sales volume, perhaps showing that people appreciate how used cars can offer really great value for money”.
*** Independent research carried out in September 2012 using vehicles then available on the Carfinance247.co.uk website, compared with the same makes and models as new, using the Which? Car depreciation tool. Example of actual depreciation carried out in September 2012 and based on: a 2012 registration plate Vauxhall Corsa 1.0. New, the cost would have been in the region of £12,685 – less than 6 months’ later, the value depreciated by 25% to £9,488;