Tough market for used car sales could continue through 2008, says Experian

News release

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Tough market for used car sales could continue through 2008, says Experian

Nottingham, UK, 2 April 2008 - As Experian^®, the global information services company, releases its latest used car sales statistics showing a further drop in sales during 2007, it warns dealers that there may be little change in 2008 as consumer sentiment remains cautious.

Kirk Fletcher, Managing Director of Experian’s Automotive division, said: “A slow housing market and the squeeze on spending have left consumer confidence low and this, in turn, hit the used car sector hard last year.  The industry recorded the highest drop in sales (down 2.4 per cent) since 2005, when used car sales first started falling. 

“The new car market, in contrast, saw a revival of sales last year, indicating that there is still a willingness to spend on a car.  However, the new car market is particularly competitive at the moment, with manufacturers launching new models and marketing them fiercely.  Topped with discounts and promotions, used car dealers are having to work harder to attract customers who are seeing the value of buying a new car over a used one.

“The recent media attention on high CO2 emissions and the imminent increases in the costs of running a car mean that it is highly likely consumers will continue to spend cautiously.  The feedback from used car dealers is that there will be opportunities to do better, but this will only be achieved if they are more prepared and on the ball.”

Age
Despite the overall fall in used car sales, older cars aged between five and seven years old recorded an increase in sales of 3.3 per cent – more than any other age group.

Kirk said: “The popularity of older cars may be linked to the increasing difficulty consumers are facing when trying to get a bank loan and with older cars costing less, consumers can either pay for them out right or get a smaller loan.”

Segment
As in previous years, the MPV, SUV and sports segments have continued to increase in sales despite a fall in all other used car segments. 

Sales of used MPVs in particular started off strong at the beginning of 2007 (up 11.2 per cent) and, while sales continued to increase, the rate of growth slowed during the following two quarters (5.4 per cent and 3.3 per cent) but rose again towards the end of the year (8.4 per cent) to end the year 6.9 per cent ahead. 

Older MPVs (over three years old) saw the biggest growth in sales.  The Renault Scenic was the most popular selling used MPV during 2007, with models aged over 10 years old seeing the biggest growth. 

Similarly, within the SUV segments, the biggest growth in sales during 2007 was in the older models.  The Toyota Rav 4 model was the most popular selling used SUV model during 2007, with those aged between five and six years old seeing the biggest growth, followed closely by those over 10 years old.  

Within the sports segment, the Toyota Celica was most popular selling model in the sports segment during 2007 and those aged between six and seven years old saw the biggest growth.

Kirk said: “Over the last ten years, the number of models launched in these segments means that the market is congested with these niche vehicles and, with increased availability, there are inevitably more attractive offers to be had.” 

Fuel
Kirk said: “There has been a lot of media attention on the imminent tax increases on the most polluting vehicles as well as the increase in fuel duty.  This has played a key role in consumer buying habits over the last few years.” 

Sales of used diesel cars have increased by around 50 per cent in the last five years, while sales of used petrol run cars have continued to fall each year.  Experian also identified an increase in the sale of used electric and hybrid vehicles.

Kirk concluded: “Consumers are more aware of the extra costs of running a car and want more information upfront before making a decision.  For used car dealers, tools such as Experian’s Environmental Report that enable them to provide the Vehicle Excise Duty and CO2 emissions details on a specific used car in the same way new car dealers currently do on new cars, could be valuable in helping to sway the car buyer.”

Experian’s Environmental Report is free as part of Experian’s AutoCheck.

Source: Experian and DVLA

Source: Experian and DVLA

Source: Experian and DVLA

Source: Experian and DVLA

ENDS

About Experian’s Automotive division
Experian’s Automotive division offers intelligent solutions, which enable its customers to optimise the potential of the vehicle, the consumer and the market.  Working with organisations operating throughout the vehicle life cycle from manufacturers through to retailers, finance houses, insurers and aftermarket service providers, solutions are delivered through two business streams.  Automotive Data and Decisioning enables customers to interrogate in real-time the history, identity and risk associated with any given vehicle and Automotive Marketing Solutions helps the automotive market target, acquire and manage customer relationships more effectively and efficiently both on and offline.