Car Retailers drive used market harder
Further strong evidence has emerged of the need for the motor industry to shift more focus onto used car sales and increase online customer experiences.
According to new research, sales of used cars grew by 39% in July. This took them to a level substantially higher than for the same month last year (43% up).
Test drives of used cars have also increased in popularity, showing a 60% rise on the previous month.
Automotive technology firm enquiryMAX surveyed 500 dealerships to gauge market trends. It appears that not only are used cars firmly in focus, but even more customers are using online resources to track down good deals on pre-owned vehicles.
The survey found that leads from online sources rose by an impressive 104%, outpacing manufacturer leads, which increased by a total of 30%.
The availability of online research and reviews is clearly underpinning this surge in used car sales.
Profits up for two major retailers
The perfect example of this is Scottish car dealer Eastern Western, which recently announced profits had risen by 6.8% to £9.5m, partly attributed to a 10% increase in used car sales.
Nottingham-based Pendragon PLC has cashed in on the used car boom too, growing its pre-tax profits by 12.7% to £47.1m. The firm – which has more that 220 sites across the UK and US – announced that used car sales had increased by 20.9% in the six months leading up to 30th June.
Pendragon also invested in increasing its online presence during the same period, adding its UK operations to both the Stratstone.com and Evanshalshaw.com websites.
These websites attracted around 26 million visitors over the past year.
New car registrations down again
This interest in used cars is in sharp contrast to the news that new car registrations in the UK fell for the fourth consecutive month in July.
This is commonly seen as a reflection of caution and economic uncertainty, as well as concerns about consumer credit.
According to Morgan Stanley’s auto analyst, the UK is facing a similar situation to the one faced by the mortgage market some years ago. According to the global financial services firm, 82% of new cars are being bought in the UK using PCP loans. This means that new cars are being purchased by those not in a position to pay for them under normal circumstances.
Increased focus on used market
Many pundits believe that this level of car financing could prove to be unsustainable.
This could mean that the motor trade must play an even stronger role in shifting gears and finding ways to provide consumers with even more access to affordable, used car deals.