According to trade guide Glass’s, the current continual rise in UK fuel prices is not necessarily having a negative impact on the market for used luxury vehicles, big prestige SUVs and supercars- the sections with many of the thirstiest cars on the market.
Recent pump selling prices are at an all time high. UK drivers paid out a then-record 120 pence per litre for unleaded petrol in July 08, and the cost is right now exceeding this amount. Nevertheless, in contrast to 2008, this time around there have not been any significant consequences for the higher echelons of the used car market.
Although the value of a standard family vehicle has increased by at least 2 per cent since The month of january, big 4x4s have recorded a rise of two times this amount. Also faring well throughout this time period are luxury cars and supercars, which have mirrored the upward trend of family cars.
“Given the series of fuel price increases, it is perhaps surprising that there has not been any kind of backlash in the premium sectors this time around,” outlined Glass’s Managing Editor, Adrian Rushmore. “In fact, the sector that could be described as the most fuel inefficient appears to be thriving, namely the prestige 4×4 sector that has recorded price resilience not seen in any other area of the market.”
The lack of an unfavorable response to record-breaking fuel prices can be put down to a number of factors, according to Rushmore. “Firstly, there is less of the ‘feel-bad’ factor that pervaded the economy and the market in the summer of 2008. Back then there was also an added buying disincentive in the shape of the large VED increases planned for the following April and plentiful used car supply. And fuel prices have been rising more slowly in recent months compared to the dramatic increases seen two years ago. This suggests that the current high price of petrol may, so far, not have appeared on the radar of many motorists, or they are simply ignoring it.
“Fuel is the second largest cost of vehicle ownership, so there is a strong argument that all used car buyers should give more consideration to pump prices,” adds Rushmore. “A used car purchase only takes place every three or more years, so it is important to consider not only fuel prices today, but also the extent to which they are likely to increase over the entire period of ownership. For example, a penny will be added to duty in October and a further 0.76p in January 2011, while a commitment to the fuel duty escalator will see pump prices rise by inflation plus 1p a litre each year between 2011 and 2014. Further rises may also come, if VAT is increased and a duty hike is introduced in a snap post-election Budget.”
Rushmore concluded: “Even though we expect used car buyers to choose more fuel-efficient cars in future, we are not predicting the demise of the large 4×4, luxury, and supercar sectors. These cars are not necessarily the principal method of transport and could represent the second or even third car in the family fleet. So the desire for ownership will remain high, and relatively low annual mileage will minimise the impact of high petrol prices.”