The Used Car Market Report 2014 A REPORT FOR BCA
Centre for Automotive Management The University of Buckingham Business School www.buckingham.ac.uk/cam
The Used Car Market a report by BCA 2
Foreword
We are delighted to bring
you this 24th edition of
the BCA Used Car Market
Report.
This year's report looks
at how the countrys
improving economic
prospects have
influenced motorists'
decisions on buying a
used car and the likely
impact of rising new car volumes on the used car market.
Our editor, Emeritus Professor Peter N C Cooke, the Centre for Automotive
Management at The University of Buckingham is a highly-regarded
commentator on the motor industry.
Professor Cooke spent over 20 years in the motor industry and has taught,
researched and written about the sector at business schools for a similar
period. He has undertaken much work on the fleet, used car and LCV sectors
and has edited the BCA Used Car Market Report for several years.
The Buckingham Automotive team has sought to retain the key elements of
this highly-respected report, and has also carried out new analysis on the
changing shape of the used car market.
Given the strong likelihood of a sustained economic recovery, the BCA Used
Car Market Report 2014 also looks at the opportunities for growth in the UK's
new and used vehicle markets.
Jon Olsen
CEO
BCA
Contents Foreword
Introduction
Overview 6
New and used car sales recovery continues The new car market The used car market Consumer perspective
UK Market Review 11
Used car volumes rise for fifth year Used:new car ratios Used car market segments Dealers used car volumes Private sector used car sales UK car market value reaches new high 15 Dealer/private sector used car market value Used car selling prices Used car prices at auction Average age of cars continues to rise 18 Seventy-nine per cent of cars reach 12 years The parc turn ratio A more promising outlook? 20
Consumer Perspective 22
Part One What Used Car to Buy? 23 What used car to consider buying? Factors driving search for used car 'Crunch factors' Part Two Where to Buy From? 26 Which used car retailer to deal with? Buying from franchised and non-franchised dealers Three-quarters of motorists buy a used car Car ownership slips in 2014 Hatchbacks market share drops Buying a used car rather than a new car? Sales of used diesels rise Part Three Car Owners' Options and Buying Intentions 32 Buying a car in the next 12 months? What type of car to buy next? Where to buy the next car? Low or 0% interest next time? Sell your car 'directly for cash'? Reasons for selling 'for cash' Part Four Economic Recovery, Running Costs, and Keeping in Touch 36 What car to buy during economic recovery? Effect of technology on motoring Alternatives to owning a car
Contents
Regional Review 39
'Personal experience' is the most powerful factor Crunch factors when deciding on a particular car Factors influencing choice of used car retailer When to buy the next car? Where to buy the next car? What type of car to buy next? Major influences on car search Selling your car 'for cash' Buying a new instead of a used car
European Overview 46
New car registrations Western European markets New member states Used car volumes Car parc Parc turn percentage Used:new volume ratios Used car sales per 1,000 inhabitants United Kingdom, Germany, Italy France, Spain
Recession, Recovery, Buyers and the Used Car Market 57
Economic change and recovery Income levels Automotive industry changes A Sting in the Tail? Some initial conclusions
Hard or Soft Landing for Used Car Values 66
New car registrations; historic and forecast A new replacement paradigm? Potential impact on used car market? Transitional or strategic change? Buyer have become more market savvy
Used LCVs and Economic Recovery 72
Rise in LCV Demand LCVS and the State of the Economy UK LCV Parc; Average Age LCVs at Auction LCV Finance Strategic Issues for Used LCV Retailers
BCA A Connected Marketplace 79
Statistical Data 81
Research 93
Introduction
The BCA Used Car Market Report 2014 aims to provide the same valuable insight
into the latest developments in the UK used car market that each of our previous
reports have done.
The UK Market Review is based on statistical information from national sources. This
is updated and compared with previous years data to provide an insight into volume
and value trends in the used car market.
The Consumer Perspective section of the report is based on a TNS-BMRB survey of
UK car owners. This comprises a review of the key issues that influence used car
buyers when deciding which car to buy and where to buy from.
This year, car owners were asked what expectations they have for buying their next
car if the economy continues to recover. They were also asked what alternatives they
might consider to owning a car outright, and how they thought technology might
affect motoring over the next five years.
The European section of the Used Car Market Report contains updated trend
information on Europes new and used car markets.
Other sections include 'A Hard or Soft Landing for Used Car Prices looking at the
likely impact of the fast-growing new car market and new car finance sector on used
car values, highlighting some caveats as the economy moves forward and the effect
of the Recession and Recovery on Used Car Buyers and the Used Car Market.
The report also looks briefly at the used LCV market and the main factors driving this
key automotive sector.
BCA is pleased to provide its Used Car Market Report 2014 to all those who have an
interest in the UK and European automotive industry.
The Used Car Market a report by BCA 6
Overview
New and used car sales recovery continues
Strong new car sales and higher used car volumes pushed combined UK car sales up
to the pre-recession level of 9.7 million in 2013.
Market volumes new vs. used; 2004 2013
Source: SMMT/TNS-BMRB
While new car sales staged a welcome recovery to 2.26 million units in 2013, they
remained some way short of the record levels seen in the early 2000s.
Falling sales across Europe saw the UK's share of Western Europe's new car market
climb a further 2.2% to 19.6% in 2013, consolidating its second place in the
European new car sales league outstripping third-placed France by 474,000 units.
Strong private sector sales and recovering fleet sector volumes saw UK new car
registrations rise 10.8% and 220,000 units to 2.26 million last year.
Used car volumes, which fell to 6.3 million units during recession, continued their
recovery rising to 7.4 million units in 2013, equalling 2006s figure.
2.6 2.4 2.3 2.4 2.1 2.0 2.0 1.9 2.02.3
6.87.3 7.4 7.1
6.76.3
6.6 6.77.1
7.4
9.49.7 9.7 9.5
8.88.3
8.6 8.69.1
9.7
1
2
3
4
5
6
7
8
9
10
11
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Milli
ons
New Used Total
Overview
The Used Car Market a report by BCA 7
The new car market
The new car market value climbed to a record high of 36.7 billion in 2013 as selling
prices increased and new car volumes reached a six-year high of 2.26 million.
Following several years over the 30 billion mark, UK new car market value fell
steeply to 28 billion in 2008, settling around that level before recovering strongly in
2012 and 2013.
New car market volume and value; 2004 2013
Source: SMMT//TNS-BMRB
UK new car registrations, which peaked close to the 2.6 million mark in 2003 and
2004, fell during recession and economic downturn to a low of 1.94 million units in
2011, with little recovery the following year.
The improving economy and attractive finance offers saw new car volumes rise
10.8% and 220,000 units to 2.26 million in 2013 as private sector sales climbed
15.6% over the previous year. New cars sales to the 25-plus fleet sector rose 5.7%
to 1.08 million, its share of the market dropping from 50.2% to 47.9% year on year.
As the UK economy shows clear signs of sustained recovery, new car volumes
continue to grow strongly up 10.6% to 1.29 million units for the first six months of
2014, the best half-year total since 2005.
The 2014 new car market has, so far, risen faster than the SMMT originally
anticipated and is expected to stabilise in the second half of the year. The SMMTs
latest forecasts see new car registrations rising 8.1% to 2.45 million in 2014 and by a
further 0.9% to 2.47 million units in 2015.
2.6 2.6
2.42.3
2.4
2.1
1.7 1.9
1.92.0
2.333.5
32.4 32.2 32.433.0
28.1
28.0
28.7 29.0
32.3
36.7
20
25
30
35
40
1.0
1.2
1.4
1.6
1.8
2.0
2.2
2.4
2.6
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
billionMilli
ons
Volume Value Scrappage deals
0.3
0.1
Overview
The Used Car Market a report by BCA 8
The used car market
UK used car volumes dropped from 7.4 million in 2006 to 6.3 million units three years
later, a