Ian Plummer, Auto Trader's commercial director, provides his view on the latest used car transactions, and what lies ahead for the market.
“At a time when the new car market is struggling, it’s reassuring to see such a solid performance in used cars. At nearly four time times the size of the new car market and with the potential for greater margins, the used market remains the biggest opportunity for retailers in the closing months of 2019.
“Whilst the current economic climate isn’t driving consumers to delay their next car purchase, it is affecting their decision between new or used. Indeed, rather than the average transaction cycle of 3.4 years extending to four, as Brexit and election anxieties persist we're seeing people less willing to risk stretching their budget to a new car and instead reverting to what may be perceived as a better value and lower cost alternative.
“These same considerations are also affecting their choice in terms of fuel type. As a consequence of the demonisation of diesel, we’ve seen used petrol values grow at a faster rate. As a result, on a like for like basis, buyers are now often viewing diesels as better value for money.
“Despite the lack of a compelling narrative or any meaningful financial incentives for consumers to make the switch from fossil to electric, used alternatively fuelled sales recorded another strong performance over the last quarter. We’re seeing a similar picture on our marketplace where searches for pure electric vehicles have increased 59% since October 2018. What’s more, this month the Renault ZOE is both the fastest and second fastest selling used car in the UK, the first time a pure EV has achieved the 'one-two'.
“In case there were any doubts, there is clearly a growing market for second-hand low emission vehicles. However, whilst AFVs undoubtedly represent an exciting opportunity for retailers, the biggest challenge to consumer adoption may no longer be the traditional perceived barriers to entry, such as cost and infrastructure, but rather a matter of long-term supply and demand for affordable nearly new or used models.”